Price and market trends: Asia ACN may extend gains; plant turnarounds tighten supply

09 June 2014 00:00 Source:ICIS Chemical Business

Spot acrylonitrile (ACN) prices in Asia may continue rising in the near term as supply in the region continued to be limited amid ongoing plant turnarounds in South Korea and China, market sources said on 27 May.

But any future gains will be tempered by lacklustre demand, they said. Major regional suppliers have raised offers to above $1,900/tonne CFR (cost and freight) NE (northeast) Asia, which was met by strong resistance from end-users, market sources said.

On 23 May, ACN prices inched up by an average of $10/tonne to $1,870-1,900/tonne CFR NE Asia, after languishing at $1,850-1900/tonne CFR NE Asia for three weeks, according to ICIS.

Weak consumption from downstream acrylinotrile-butadiene-styrene (ABS) resins and acrylic fibre (AF) sectors saw ACN prices shed 7.4% over a two-month period to early May, according to ICIS.

Asia ACN

Firm feedstock costs prevented spot ACN prices from falling further. Tighter supply is now providing a boost to the market in spite of weak demand, market sources said. Scheduled turnarounds at a number of major ACN facilities in China and South Korea this month will keep availability of spot material scarce.

In China, Fushun Petrochemical’s 92,000 tonne/year plant in Liaoning province was taken off line on 16 May for around 15 days of maintenance, a company source said.

Sinopec Qilu’s 80,000 tonne/year plant at Zibo in Shandong province was shut around 20 May for 18-20 days of turnaround, according to a company source.

China is a key importer of ACN in Asia.

In South Korea, Tongsuh Petrochemical’s 245,000 tonne/year No 3 ACN line in Ulsan is currently down for a three week-turnaround from 13 May, a company source said.

Deep-see cargoes flowing into Asia are scant, with US and European facilities running at reduced rates, market sources said.

Suppliers in Asia that are holding low inventory have hiked their offers for ACN because of the general tightness in supply, but end-users continue to resist higher prices.

“The demand is flat – no big improvement – so I feel the prevailing prices are too high to pass on,” a downstream fibre producer said.

The strong upward pressure on prices because of tight supply, however, is expected to ease next month.

By Judith Wang