Europe ACN demand divergent on end use

01 March 2013 17:12  [Source: ICIS news]

LONDON (ICIS)--European acyrlonitrile (ACN) demand levels are sharply divergent between specialty and commodity applications, sources said on Friday.

Consumption in the acrylamide market, and for specialty fibre and premium automotive applications, remains high.

Some fibre producers said that there is a growing gap between demand for commodity and specialty fibre products, with commodity fibre demand remaining low, while specialty fibre demand is increasing.

“We sell a lot in technical applications, which is very good for us, but commodity prices are not good. We don't have to cut down our production. We run more or less full capacity,” a fibre manufacturer said.

Specialty products are more resilient to a downturn in macroeconomic conditions, because they have higher desirability and fewer manufacturers.

Sources added that operating rates at fibre producers differs greatly depending on the mix of specialty and commodity goods, with some players operating at full rates, and others operating as low as 70%, according to market estimates.

“We believe that people are buying [fewer] consumer goods as a whole. The problem is not manufacturers not doing a good job, but the consumers aren't buying,” an ACN trader said.

Small and mid-sized auto demand year-to-date has been estimated at 15% lower in 2013  compared to the same period in 2012.

“We'll reduce [output by] 70% in March and April. We're not decreasing because of higher prices but because of weak demand... You only need to think of what's being discussed in auto industry. Luxury brands performing well, but you have those bread and butter [brands] that aren’t,” an ACN buyer said.

Demand from the premium automotive sector remains firm because of high exports to Asia caused by upward social mobility increasing the desirability of luxury brands.

($1 = €0.77)

By: Mark Victory
+44 208 652 3214

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