Asia ACN hits highest since May ’12; may soon halt uptrend

Judith Wang

29-Aug-2014

Focus story by Judith Wang

Asia ACN hits highest since May SINGAPORE (ICIS)–Spot acrylonitrile (ACN) prices in Asia may stop rising after hitting their highest levels in more than two years, as buyers are posing stiff resistance to higher offers despite tight global supply, market sources said on Friday.

Spot offers were heard at $2,080-2,100/tonne CFR (cost and freight) NE Asia (northeast), against buying ideas capped at $2,050/tonne CFR NE Asia, they said.

On 22 August, ACN was assessed at $2,050-2,080/tonne CFR NE Asia – levels last seen in May 2012, according to ICIS data.

Rising cost of feedstock propylene and plant shutdowns in the second quarter drove up ACN prices steadily from mid-May this year, market players said.

Supply of the material in the global market is expected to remain tight in the coming months, market sources said.

In Asia, PTT Asahi Chemical’s 200,000 tonne/year plant in Map Ta Phut, Thailand, is currently shut for maintenance. The unit was taken off line on 21 July and is expected to restart by end-August.

Jilin Petrochemical’s 106,000 tonne/year No 1 ACN line and 120,000 tonne/year No 3 line in  northeastern China were shut on 27 August because of feedstock shortage, with the shutdown likely to last a week, a company source said.

In Europe, Lukoil plans to shut its 150,000 tonnes/year ACN plant in Saratov, Russia, for turnaround  from mid-September to end-October.

INEOS Nitriles, meanwhile, has scheduled a five-week shutdown at its 220,000 tonne/year production unit in Cologne, Germany, from end-August. The shutdown is meant to facilitate the plant’s statutory five-year inspection and cleaning.

In view of the continued scarcity of supply, major Asian producers have maintained their high offers and are not rushing to offload cargoes amid low stocks, market sources said.

Asia is also not getting much deep-sea supply from Europe and the US.

“The arbitrage window is not wide enough for me to move the cargoes to Asia,” a Europe-based trader said.

On the demand side, major downstream acrylonitrile-butadiene-styrene (ABS) and acrylic fibre (AF) producers have been raising prices of their products to pass on to end-users the high cost of feedstock ACN, market sources said.

Other end-users that could not pass on the increased production cost to customers are looking at reducing  output or even shutting down plant operations if ACN prices failed to reverse course.

“The pace of price rise for AF is still slower than feedstock ACN rise,” a downstream fibre producer said.

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

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