Acrylic fiber forecasts stability amidst declining operating rates

Posted on March 25. The implementation of the acrylic plants' unit adjustment plan was expected to result in a reduction in the operating rate for April to approximately 70%. This decline was mainly due to a production cut at Hangzhouwan Acrylic starting in mid-April and a week-long maintenance period at Ningbo Zhongxin.

Acrylic fiber trading prices had remained stable this year, contrasting with the volatile nature of other fibers. While this stability benefited downstream buyers, it limited speculative trading. However, it also amplified the negative effects of weak orders. Spinners faced challenges such as fewer orders and lower profits due to orders shifting to Southeast Asia and South Asia. This situation weakened acrylic fiber plants' advantages in terms of freight and timeliness.

Looking ahead, while acrylonitrile prices might slightly decrease, it was unlikely to significantly affect the acrylic fiber prices. For example, with acrylonitrile priced at 9,700yuan/mt, the current cost of acrylic fiber was around 14,400yuan/mt, showing little deviation from offers and leaving little room for profits. Consequently, a slight decrease in acrylonitrile price will not affect acrylic fiber prices.

In terms of demand, while the yarn industry experienced scarce new orders, inventory levels had increased following the resumption of production and stocking up following the Spring Festival. As a result, there was no basis for a decline in acrylic fiber prices.

Acrylic fiber plants maintained stable supply, but inventories were on the rise. With both raw materials and demand showing no signs of decline, it was vital to balance production and sales. However, the looming issue of high inventory burdened future decisions, making the reduction of production to stabilize prices a prudent choice at present.