16 November 2012 09:31 [Source: ICB]
Asia's acrylonitrile (ACN) producers are cutting output on hopes of stemming the decline in values of their product amid an influx of deep-sea cargoes, which are competitively priced, sources say.
Surplus stocks from Europe and the US have been heading into Asia even though demand in this region has stayed weak, they said.
"The last deal done into India was $1,650/tonne CFR India, and we expect prices to fall lower to $1,500/tonne CFR India," an AF producer in India said. Among the regional ACN makers that cut production - via plant shutdowns or cuts in run rates - in a bid to support prices at current levels include China's Jilin Petrochemical, Japan's Asahi Kasei, South Korea's Taekwang Petrochemical and Taiwan's China Petrochemical Development Corp (CPDC).
"Our margins have fallen into negative territory and we have no choice but to further cut the operating rate or shut down the plant if prices drop further," an Asian ACN producer said. Another Asian supplier said: "We expect demand to remain weak and prices to remain flat till the end of the year."
Taekwang Petrochemical will consider further cutting production at its 290,000 tonne/year plant in Ulsan, South Korea, from 90% to 80% from mid-November.
CDPC, meanwhile, has brought forward by a week a planned turnaround of its ACN facility in Taiwan, said a company source. Its two ACN lines with a combined capacity of 240,000 tonnes/year were shut down between 3 and 4 November, ahead of the original schedule on 10 November, the source said.
Asahi Kasei, on the other hand, decided to extend the shutdown of its 150,000 tonne/year line at Kawasaki, Japan, by another week to mid-November.
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