Europe ACN market takes slow, steady steps towards a still-distant full recovery

Author: Jane Massingham


LONDON (ICIS)--The European acrylonitrile (ACN) market is recovering on the back of improved demand from many end sectors, but it is still a long way to go before it returns to a “normal” situation.

- Noted improvement in AF demand

- Automotive, ongoing concern

- Ability to forecast still hampered by uncertain future

Demand for acrylic fibre (AF) was severely hit during the coronavirus peak in Europe as lockdowns caused the retail sector to shut and many factories close.

Output rates for some were at 50% early in June, but as the market moves into July and the supply chain works its way through stocks, higher rates in July are likely.

One source mentioned running rates at 65% in July, while another key consumer referred to output closer to 75%.

“Every week is better than the previous one in terms of business,” one consumer said.

"We cannot yet say for sure what will happen in August.”

Acrylonitrile- butadiene-styrene (ABS) demand has improved in some end sectors, but automotive sector remains one of the key concerns, with fiscal incentives by governments doing little to get the end-user back to purchasing new cars.

Nevertheless, appliances for ABS are slightly firmer in June than May, and this trajectory is expected to continue to July

Nitrile rubber (NBR) is also negatively impacted.

While the situation is better than last month, sources noted it is likely to be a “a roller-coaster for the remainder" of the year.

Some sources suggested that some NBR areas closely aligned with the car industry could potentially face further downtime in July.

Other end sectors are performing slightly better, however, like the latex gloves industry as demand from the medical sector remains buoyant.

Other sectors such as acrylamide are registering a steadier picture through the peak of the pandemic, but there was at least one example here where demand has tailed off as it is taking time for stocks to run down through the chain.

Some market players said they were still unable to look beyond the following week when it comes to issuing mid- and long-term forecasts.

While the summer is traditionally a period when the market slows down, this this there are some questions regarding that as well.

The slowdown is normally mostly felt in the south of Europe, where much of manufacturing closes during the holiday period.

“A lot of makers will still stick to summer slowdown and shutdowns will carry on – we don’t see that they will skip that,” one seller said.

There was some question that the outages may be reduced or delayed as customers tried to make up for the volume lost in April and May at the peak of the pandemic.

However, it seems demand is perhaps not at that level and sources are happy.

“We are not yet positive, but a bit more certain on demand levels going forward,” one seller said.

It added that some of its consumers were able to look at a three-month buying pattern, something that has not been possible for much of the past quarter.

While the mood is a little more optimistic, it is still difficult to plan too far ahead for many and most sources are still struggling to get back to a normal demand pattern.

ACN is used in the production of synthetic fibres for clothing and home furnishings, engineering plastics and elastomers.

Front page picture: German car maker Volkswagen factory in Wolfsburg, Germany, shut during the pandemic's peak
Source: Jens Schlueter/EPA-EFE/Shutterstock 

Focus article by Jane Massingham