21 May 2012 05:02 [Source: ICIS news]
By Helen Yan
Current ACN offers are at around $1,900/tonne (€1,482/tonne) CFR (cost and freight) northeast (NE)
In the week ended 18 May, ACN spot prices were assessed at $1,850-1,900/tonne CFR NE Asia, down by $475/tonne from early April, according to ICIS.
The 20% slump was largely attributed to the sharp decline in demand, as AF and ABS makers in the region have either shut their plants or cut production.
ACN prices are also under pressure from declines in upstream product prices, with current
Traders with stocks in hand have been offloading cargoes at competitive rates on fears that ACN prices will continue falling amid heightened market concerns over the eurozone crisis.
“Traders with deep-sea cargoes are prepared to offload at $1,700/tonne CFR China for June shipments and we are looking to buy at $1,650/tonne CFR China,” a Chinese distributor said.
“We are looking at $1,650/tonne CFR India for June shipments,” the AF maker said.
However, several ACN producers are considering further cutting operating rates at their facilities if their margins get eroded.
“We believe that prices will bottom out at $1,800/tonne CFR NE Asia and will rebound when the derivative AF and ABS makers return to the market to replenish their stocks in the second half of June,” a South Korean ACN producer said.
ACN demand traditionally peaks in the months of July to September as the derivative AF and ABS makers usually ramp up production so that they can ship out their finished products ahead of the Christmas holiday season, industry sources said.
The derivative AF is used to make winter apparel, carpets and household furnishings while ABS is the raw material for a wide range of products including toys, household appliances, office equipment and automotive components.
Demand for ACN has significantly weakened over the past months as several downstream AF and ABS plants in China, Taiwan and South Korea are either shut for maintenance or running at reduced rates.
Among the AF makers that shut their plants for maintenance are
ABS makers such as
Weak downstream demand prompted a number of ACN producers to also cut production.
“We will continue to run our plant at 85% of capacity in June and will consider shutting down our plant if [ACN] prices drop below $1,900/tonne as our margins will fall into negative territory,” said a company source.
Meanwhile, PTT Asahi Chemical’s 200,000 tonne/year ACN plant in Map Ta Phut,
($1 = €0.78)
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