Asia ACN supply to tighten; soft China prices weigh on market

SINGAPORE (ICIS)–Supply of acrylonitrile (ACN) in Asia is expected to tighten in May and June but regional prices may be weighed down by recent weakness in China’s domestic market, industry sources said on Wednesday.

For seven straight weeks to 21 April, ACN prices have stayed at $1,550-1,600/tonne CFR  (cost and freight) NE (northeast) Asia, according to ICIS data.

A tug-of-war between buyers and suppliers have been hampering transactions in the Asian ACN market.

Regional producers have maintained their offers at $1,600/tonne CFR NE Asia or higher this week, while buying indications were capped at $1,550/tonne CFR NE Asia.

Some market players expect Asia’s ACN prices to be stable-to-firm because of the expected tightening of supply in the coming months.

In China, Jilin Petrochemical plans to shut its 120,000 tonne/year No 3 unit in May for 10-15 days, while in South Korea, Tongsuh Petrochemical plans to shut its 245,000 tonne/year No 3 plant in Ulsan on 16 May-11 June.

In Japan, Asahi Kasei is scheduled to conduct maintenance at its 200,000 tonne/year ACN plant in Mizushima on 12 May-6 July.

Most of the regional producers are currently building stocks in anticipation of the heavy turnaround season, and are under no pressure to immediately sell cargoes, market sources said.

But ACN prices in Asia have largely mirrored the movement in the Chinese domestic market, whose recent weakness could exert a downward pressure on the regional market, industry sources said.

On 21 April, Chinese prices were assessed at yuan (CNY) 12,500-12,600/tonne ex-tank, down CNY100/tonne at the high end of the price range in early March, according to the China editorial team at ICIS.

Buyers and end-users in Asia have been resisting prevailing ACN prices citing the slowing downstream demand and falling prices of feedstock propylene.

Propylene’s average prices have declined 13.8% from early March to $810/tonne CFR NE Asia on 21 April, according to ICIS data.

“The feedstock propylene prices are falling … but ACN prices remained no change. This dampened our buying interest,” a downstream user said.

Focus article by Judith Wang

Picture (top): Acrylonitrile (ACN) is used in the production of acrylic fibres, which go into home furnishings like sofas. (Source: View Pictures/REX/Shutterstock)