Market Overview: New production capacity is gradually being released, and the domestic acrylonitrile spot market continues to decline this week. Prices are gradually bottoming out, and the support for manufacturer maintenance is gradually weakening. As of April 25th, the mainstream negotiation for container self pickup in East China ports is around 8200-8300 yuan/ton, a decrease of 400-500 yuan/ton from last week. Short distance delivery in Shandong market is around 7900-8100 yuan/ton, a decrease of 450-550 yuan/ton from last week.
New production capacity gradually releases, supply increases:
After a period of no new production capacity gap in 2024, the domestic acrylonitrile industry will usher in a new round of concentrated capacity expansion in 2025. Five enterprises will add or expand capacity during the year, with a total of 1.31 million tons/year of new production capacity planned, as shown in the table below.
As of April, 390000 tons of new acrylonitrile production capacity have been successfully put into operation this year. At present, the total production capacity of acrylonitrile in China has reached 4.789 million tons per year, with a year-on-year increase of 8.9%. It is expected that the total production capacity of acrylonitrile will reach 5.709 million tons per year by the end of 2025, with a year-on-year increase of 30%.
At present, with the gradual release of new production capacity, the downward trend of acrylonitrile market prices in China is also intensifying, especially in the Shandong market. The oversupply situation in the region is still prominent, and the spot negotiation price has gradually fallen to around 8000 yuan/ton and below. Due to the maintenance of Anqing Petrochemical’s 80000 ton production line and the low load operation of other large factories, the prices in the East China market are still relatively high compared to the Shandong market, but they are also showing a continuous downward trend.
Tariffs affecting domestic demand and shrinking export demand:
In addition to the increase in supply caused by the release of new production capacity, the demand for acrylonitrile has also shown signs of contraction. The imposition of tariffs by China and the United States has affected domestic demand and exports in some downstream areas of acrylonitrile, including ABS terminal home appliances, acrylic terminal textiles, nitrile latex, and glove products, thereby suppressing production, sales, and operating conditions in various industries and weakening the consumption of acrylonitrile. The operating rate of the acrylic fiber industry has dropped to around 50%, and the operating rate of the ABS industry has also dropped to below 70%. Only the operating rate of acrylamide remains at a normal level, but the industry also stated that its demand is lower than the same period in previous years, which may affect the sustainability of operating in the later stage.
The decline may gradually narrow and the price bottom may appear:
Although the May Day holiday is approaching, there is no obvious stocking atmosphere before the holiday. It is expected that the negative feedback on acrylonitrile demand caused by tariff policies and the economic and foreign trade situation will be further highlighted in the future. In addition, the new 400000 ton acrylonitrile plant of Zhenhai Refining and Chemical is also planned to be put into operation in May and June. With the further deepening of the supply-demand contradiction and the worsening of the loss situation in acrylonitrile production, some production enterprises will be forced to stop or reduce production, and the market decline may gradually narrow. Based on the fact that acrylonitrile prices have fallen to historically low levels, it is expected that the bottom of the market price may appear in May, but when the market rebounds or how long it will last at the bottom will still be determined by the degree of supply reduction.