OUTLOOK ’19: Europe ACN spot market to stabilise

LONDON (ICIS)–The European acrylonitrile (ACN) market is likely to be better balanced in 2019 after a very volatile 2018.

There is some expectation for spot levels to stabilise at the beginning of next year after significant hikes followed by sharp drops in the year.

Spot prices in Europe and Asia have been in freefall since the beginning of October, which has partly been a correction from previously high levels.

Softening feedstock prices and slower-than-expected demand in both Europe and Asia contributed to the downward price pressure.

The European spot range lost $800/tonne between the beginning of October and the first week of December.

The nosedive is now largely expected to have ended, with the current spot levels deemed representative for current market fundamentals.

New capacity coming online in Asia could add further relief to the global ACN balance.

Shandong Haili Chemical Industry Co started up its 130,000 tonne/year ACN plant in August, while Jiangsu Sailboat Petrochemical is set to start up its 260,000 tonne/year phase-two ACN project at the beginning of 2019.

However, some participants on the sell side in Europe have been sceptical that the re-balancing of the market will continue long term, as downstream industries are still expected to grow at a higher speed than global ACN production rates.

Separately, two major maintenance closures are taking place in Europe in May 2019. This is likely to limit spot availability in the first half of the year with both of the producers expected to concentrate on contractual volumes instead.

The planned shutdowns could also affect product availability later in the year.

Global demand for downstream acrylic fibre (AF) and acrylonitrile butadiene styrene (ABS) markets will be another key factor for the ACN market in 2019.

Demand for both applications have dwindled. The AF market suffered on the back of competitively priced alternative products available, while ABS was affected by a sharp decline in the European automobile industry.

Focus article by Yana Palagacheva