FocusAsia ACN may hit $2,500/tonne on tight supply, rising C3 costs

25 January 2011 04:56  [Source: ICIS news]

ACN goes into production of acrylic fibre (AF), which is used in clothing and home furnishings, such as carpets, upholstery, cushions and blankets.By Helen Yan

SINGAPORE (ICIS)--Dwindling supply and rising costs of feedstock propylene (C3) may soon push Asian acrylonitrile (ACN) prices to $2,500/tonne (€1,825/tonne), the highest level since May 2010, industry sources said on Tuesday.

Spot ACN prices were last assessed at $2,380-2,420/tonne CFR northeast (NE) Asia and at $2,400-2,450/tonne CFR India on 21 January 2011, according to ICIS data.

In May last year, prices were at $2,400-2,450/tonne CFR NE Asia and at $2,450-2,500/tonne CFR India, ICIS data showed.

“The customers may have no choice but to pay $2,500/tonne if they need to secure any cargo as supply is very tight,” said a trader.

China and India are major importers of ACN, the feedstock used in the production of acrylic fibre (AF), which is used in clothing and home furnishings, such as carpets, upholstery, cushions and blankets.

China imported 42,000 tonnes of ACN in December 2010, more than 40% of which were secured from the US Gulf, according to Chinese traders.

India imports around 10,000 tonnes of ACN each month.

AF makers decried the relentless spike in ACN prices, which were hitting their margins.

“If the ACN price was to continue to rise further, we may have to cut operating rates as our margins are being severely eroded,” an AF producer said.

“We cannot afford to pay higher than $2,400/tonne or we will have no margins,” he added.

However, ACN supply was expected to tighten further in the coming months.

“Deep-sea supply from the US Gulf and Europe is expected to tighten due to turnarounds,” said an ACN producer.

In the US, major ACN producer Ineos has a scheduled month-long shutdown at its 540,000 tonne/year plant at Green Lake, Texas, in February.

In Mexico, Pemex’s 60,000 tonne/year ACN plant was shut in January for maintenance.

In Asia, Korean producer, Taekwang Industrials, plans a three-week shutdown at its 250,000 tonne/year plant in Ulsan, South Korea.

In Europe, ACN supply could remain tight into the second quarter due to upcoming turnarounds in May.

Meanwhile, the continued price uptrend in feedstock propylene was also driving up ACN prices, traders said.

In the US, January feedstock chemical grade propylene rose by 11-15 cents/lb to 70-74 cents/lb, while in Europe, January propylene contracts rose by €110/tonne to €1,070/tonne.

Asia propylene costs had increased by $60-80/tonne in the past month to close at $1,340-1,360/tonne CFR northeast (NE) Asia in the week ending 21 January.

($1 = €0.73)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
To discuss issues facing the chemical industry go to ICIS connect


By: Helen Yan
+65 6780 4359



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index