07 December 2012 10:31 [Source: ICB]
China's acrylonitrile (ACN) prices may continue rising in the coming weeks because of lower production rates and tight supply, market sources say.
Domestic ACN prices were assessed at yuan (CNY) 12,500-12,700/tonne ($2,006-2,039/tonne) ex-tank in east China on 29 November, up by CNY1,000/tonne compared with the first half of November, according to data from Chemease, an ICIS service in China.
Producers are planning to reduce their plants' output as their margins have been largely eroded because of the firm raw material propylene prices, an industry source said.
Furthermore, the scheduled start-up dates of new ACN plants have been delayed, which is good news for the market in December, the source added.
Anqing Petrochemical may delay the start-up of its new 130,000 tonnes/year ACN plant from 20 December to early next year, a market source close to the company said.
Producers who have scheduled production cutbacks include Jilin Petrochemical and Shanghai SECCO Petrochemical, another source said.
Jilin Petrochemical plans to shut one of its ACN lines from 3 December onwards, while Shanghai SECCO plans to run its 260,000 tonne/year ACN unit at 90% capacity in December, the source added.
Depleting stocks are tightening the supply, with the inventories at the ports having been taken up and spot cargoes currently said to be at a low level.
Furthermore, some cargoes which were slated to arrive in December have been delayed to January, a port source said.
"We cancelled some import cargos which would arrive in December before we knew the cutbacks from domestic producers amid weak downstream demand," one Chinese trader said.
Buyers from the end-user sector have remained cautious in response to weak downstream demand for acrylonitrile-butadiene-styrene (ABS), acrylic fibre (AF) and acrylamide market, according to another trader.
"We are still running [the plants] at a reduced rate and the whole market is still weak, as demand has not improved significantly," one ABS producer said.
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