Asia ACN gains 5% over four months; may sustain uptrend

Focus story by Judith Wang

SINGAPORE (ICIS)–Spot acrylonitrile (ACN) prices in Asia rose by 5% over a four-month period on the back of tight supply, and this uptrend is expected to be sustained in the near term, industry sources said on Tuesday.

On 11 July, ACN prices were assessed at $1,950-1,970/tonne CFR (cost and freight) NE (northeast) Asia, from $1,820-1,910/tonne CFR NE Asia on 11 April, according to ICIS data.

High costs of feedstock propylene, as well as reduced inflow of deep-sea ACN cargoes into Asia, have been driving up prices, market sources said.

Propylene prices increased 4% to $1,450-1,465/tonne CFR NE Asia in early April to July, ICIS data showed.

Major regional ACN producers have had to increase prices to recoup margins, market sources said.

US and Europe have limited volumes for exports into Asia amid plant shutdowns and production cuts, they said.

Within Asia, maintenance at ACN facilities in China and Taiwan in May exacerbated the tightness in supply, market sources said.

Buyers from downstream acrylonitrile-butadiene-styrene (ABS) and acrylic fibre (AF) sectors initially hesitated to procure cargoes, on expectations that ACN prices would soften once the plants that had turnarounds resumed operations.

But the ACN market in Asia has remained bullish into the third quarter on continued supply tightness of supply and strong feedstock costs.

In end-July, PTT Asahi Chemical is planning to shut its 200,000 tonne/year ACN plant in Map Ta Phut, Thailand, for around a month of maintenance, a company source said.

Asahi Kasei, meanwhile, plans to close its 150,000 tonne/year ACN plant at Kawasaki next month, citing challenging operating climate in recent years.

“I don’t think the supply tightness will be eased in the third quarter, as the supply from the US and Europe will be very limited amid the turnarounds in August and September,” a regional trader said.

In the US, Ascend Performance Materials plans to shut down its 310,000 tonne/year Chocolate Bayou AN7 plant in Texas for two weeks in August for a turnaround.

In Germany, INEOS Nitriles will shut its 220,000 tonne/year ACN production unit in Cologne for five weeks from end-August, for the plant’s statutory five-year inspection and cleaning.

In Russia, Lukoil will halt production at its 150,000 tonne/year plant in Saratov, for 40 days of planned maintenance from around 6 September.

Downstream ABS, AF and acrylamide producers have started implementing price hikes in line with their rising feedstock costs, market sources said.

Some Chinese end-users anticipating further price increases were actively seeking cargoes amid limited domestic supply.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections