Acrylic fiber pressure mounts amid rising feedstock costs

Acrylic fiber prices have remained stable over a prolonged period, but rising costs gradually push the industry from profit to loss. Currently, the theoretical cash flow for acrylic staple fiber is about -280 yuan/mt.

Acrylonitrile prices are expected to rise in December, driven by the potential shutdown of a unit at Zhejiang Petrochemical and delayed production from new units. This has led to price increases at the high end, with low-end prices gradually following. While traders align their prices accordingly, they are reluctant to make proactive adjustments due to the high settlement pressure in recent months.

For acrylic fiber, price increases are unlikely due to subdued demand. To raise prices, manageable inventory and ensuring that price hikes do not discourage downstream buyers are crucial. Inventory pressure can be alleviated through production cuts, but in terms of purchasing interest, some downstream yarn mills continue to be cautious, anticipating potential price drops before the traditional buying season, which suppresses demand. On the other hand, not reducing prices puts pressure on mills to clear inventory, recover funds, and manage procurement challenges, creating a tough balancing act.

Plants may prefer price increases due to current losses, but sluggish demand and the upcoming Chinese Lunar New Year at the end of January make implementation difficult. The downstream stocking period will be from December to mid-January, during which acrylonitrile is expected to strengthen before weakening. Therefore, maintaining stable acrylic prices while adjusting cash flow may be a more suitable strategy.