Will China ACN prices go downward in Aug?

China ACN prices stop decreasing and rebound before mid-July benefited from the maintenance of PetroChina Jilin and Jiangsu Sailboat, but the sales are hard to improve significantly as downstream buyers mainly procure for pressing demand, so offers stabilize at around 14,700yuan/mt. Later, ACN plant operating rate climbs up to above 90% with the production restart, while downstream AM market is in slack season, and acrylic fiber plants cut production under the cost pressure, so ACN prices are expected to weaken. In addition, Zhejiang Petrochemical’s new unit may be put into operation in end month.

It is understood that the new unit of Zhejiang Petrochemical plans to mainly supply South China market, while the old line plans to have maintenance after the new unit comes on line. So even the new unit puts into operation in end month, the actual supply may change little. The total supply pattern is similar to that in May.

For demand, compared with May, the operating rate of acrylic fiber plants climbs up in July. Currently, the operating rate maintains at around 65%, and is possible to rise later. Compared with May, the average operating rate rises by 20%. But downstream spinning mills’orders may turn weaker after a half month and the acrylic fiber prices have been high currently, so later, downstream spinners may reduce the purchases of acrylic fiber. Therefore, acrylic fiber plant operating rate may move lower later.

In terms of the average prices, ACN prices are averaged at 13,966yuan/mt in May, while in Aug, the average price may be higher only seeing from supply and demand. But the export space narrows as only one overseas units are under maintenance in Aug. Therefore, the digestion may be more difficult in Aug, while prices are supposed to be close to the level in May.