Update on acrylonitrile industry project adjustments

Certain projects in the acrylonitrile industry have been adjusted. The timeline for PetroChina Jilin's upgrade is now clearer. Although the Yulong Island and Tianjin Nangang ethylene projects are delayed, they are still expected to commence this year. Zhenhai Refining & Chemical's project remains on schedule.

Gulei Petrochemical's 260kt capacity remains, but the project has undergone some adjustments:

1. The process technology has shifted from slurry coal gasification to the aerospace furnace.

2. The product plan has been revised: the hydrogen cyanide-acrylonitrile co-production unit has been canceled, the hydrogen cyanide unit has been expanded, the air separation unit has been enlarged, and liquid argon products have been introduced.

3. The master plan has been updated to enhance key environmental facilities. The western area sewage station will now also handle wastewater from the nylon 66 project. The waste gas and liquid incinerator will process emissions and waste oil from the project, and the emergency response pool and flare will be adapted accordingly.

4. Construction land boundaries have changed: the western area has shrunk and now overlaps with the Dodecanol project site, while the eastern area has expanded, affecting the site for a wastewater pretreatment facility. Overall, the land area in the western zone has decreased, and the eastern zone has increased, with no other significant changes.

The revised project entails a total investment of 14.84 billion yuan, with 910.5 million yuan allocated for environmental protection (6.1% of the total). Construction is slated to commence from October 2024 to October 2026.

Overall, ACN capacity expansion continues, with future growth mainly driven by ABS and adiponitrile. This should help absorb excess capacity related to nylon materials, though the current impact is minimal. As new capacities come online, competition will increase, and the weakening of profitability may lead to coordinated production cuts to maintain prices.