ACN nearing the bottom, ready to rebound?

Acrylonitrile has been fluctuating downward since February, but prices started to stabilize by mid to late March, with only a slight decline remaining. The industry is largely cautious, adopting a wait-and-see approach.

The price decline has stalled mainly due to cost factors and expectations regarding future supply. On the cost side, propylene prices in Shandong have been hovering around the average level since February, highlighting the weakened profitability in the acrylonitrile industry. For instance, the theoretical cost of acrylonitrile is around 9,200 yuan/mt, while the current propylene price is 6,900 yuan/mt. Despite possible adjustments in actual costs, the overall loss situation remains challenging.

Regarding supply, Secco has already cut production by half, while Sierbang plans to reduce output in April, tightening supply in East China. Yulong Petrochemical is currently in the raw material feeding stage, but it remains uncertain whether its products will meet quality standards and whether the startup will proceed smoothly. If operations go as planned, its supporting ABS production may also come online, which would have a relatively limited impact on Shandong. Due to its location, Sinochem Quanzhou faces disadvantages in shipping costs and schedules when supplying East China. Industry participants expect its impact on the South China market to be more significant. Dongfang Petrochemical's planned production cut in April could open up opportunities for Sinochem Quanzhou to expand in South China. Additionally, exports through its subsidiary, Sinochem Plastics, are likely to become an increasingly important option.

Overall, future supply is expected to fluctuate regionally, but reduced volumes in the key East China market may offer some price support. However, the short-term impact could be limited by the need for plant destocking. While prices show signs of stabilizing, a sustained rebound lacks strong fundamental drivers. Moreover, routine maintenance in the acrylic fiber industry, expected in April-May, could further intensify sales pressure and weigh on the market. This suggests that the recovery still faces significant headwinds.