China’s ACN prices fall in H1 June on poor demand, ample supply
18 June 2012 09:51 [Source: ICIS news]
SINGAPORE (ICIS)--?xml:namespace>China’s domestic acrylonitrile (ACN) price fell by 14% in the first half of June because of the poor global macroeconomic condition, weak demand and ample supply, industry sources said on Monday.
China’s ACN spot prices declined to yuan (CNY) 11,100-11,200/tonne ($1,743-1,758/tonne) ex-tank east China on 18 June, compared with CNY13,000-13,100/tonne on 1 June, according to Chemease, an ICIS service in China.
The intensifying eurozone crisis and falling crude oil prices have dampened buyers’ appetite.
“The US and European economic are fragile, which has severely influenced China’s exports; end-products have high stock levels... [when it’s] time to de-stock, I’ll keep at sidelines although ACN price are already in a low position,” a buyer said.
Downstream acrylonitrile-butadiene-styrene (ABS), acrylic fiber (AF) and acrylamide plants are operating at low rates. The current average operating rate of ABS and AF plants is 60-65% of capacity, while that of acrylamide is around 50%.
“Our company may not raise the operating rate until downstream demand improves. However, summer is coming, and the [off-peak season for textile is probably] in July or even August,” an AF producer said.
In addition, China’s domestic supply is ample, despite maintenance shutdowns at some ACN producers such as Jilin Petrochemical and Fushun Petrochemical for most of June.
Port inventories in China are high and a few import cargoes will arrive in the second half of June, according to Chemease.
Domestic producer Shanghai SECCO Petrochemical’s spot cargoes arrived in the first half of June, Chemease data showed.
In addition to some producers in North China dumping their stock to the market, China’s domestic supply is sufficient compared to the poor spot appetite.
“Many ACN producers all over the world have started to reduce production as falling prices and weak demand will limit spot supply,” a domestic producer said, citing Japan’s Asahi Kasei, South Korea’s Taekwang Industrial and Taiwan’s China Petrochemical Development Corp (CPDC) in Asia, as well as domestic Chinese producers such as Jilin Petrochemical and Fushun Petrochemical.
“On the other hand, ACN spot prices have dropped sharply and quickly, and producers are suffering the loss. It’s not surprising if some producers will have further [production] cuts in the near future,” the producer said, adding that prices may be close to bottoming out.
($1 = CNY6.37)By: Ivy Ruan
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