14 June 2013 09:42 [Source: ICB]
However any uptrend in ACN prices could be limited given relatively weak downstream demand
Asia ACN prices rebounded to $1,650-1,730/tonne (€1,254-1,315/tonne) CFR (cost & freight) NE (northeast) Asia on 31 May after prices dropped from $1,950-2,000/tonne CFR NE Asia in mid-March, according to ICIS.
In response to the falling ACN prices and weak demand from the downstream acrylic fibre (AF) and acrylonitrile-butadiene-styrene (ABS) sectors, major suppliers in Asia have been running their plants at reduced rates of around 80% capacity in the past two months.
This has reduced supply and deterred the price downtrend, sources said.
Taiwan's China Petrochemical Development Corp (CPDC) is running its 240,000 tonne/year ACN plant in Kaohsiung at 80-85% capacity, and Formosa Plastics Corp (FPC) is running its 280,000 tonne/year ACN plant at Mailiao at around 85% capacity amid weak demand.
In Japan, Asahi Kasei is running its 150,000 tonne/year ACN plant in Kawasaki at around 70% capacity, while its 200,000 tonne/year plant in Mizushima is operating at about 80% capacity.
"We have no choice but to reduce the rate given the weak demand and slow offtake of cargoes; otherwise, we will definitely lose much money," an Asian producer said.
Meanwhile, rising propylene costs lent some support to ACN prices, sources said.
Asia propylene prices increased to $1,345-1,365/tonne CFR NE Asia on 31 May, from $1,270-1,310/tonne CFR NE Asia on 26 April, according to ICIS.
Some sellers and traders raised their prices in line with rising feedstock, but the end-users said they could not pass on the hikes if ACN prices rise too sharply as there is no improvement in demand.
However, most market participants said the uptrend in ACN prices could be limited given the relatively weak downstream performance.
"I don't expect this round's ACN price rise to be very high, unless the demand improves much," a trader said.
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