Acrylonitrile bottomed out in week-two of February, acrylic stable
Acrylonitrile prices jumped on an upward trajectory across region in the second week of February due to planned and unplanned shutdown and force majeure. They appear to have bottomed out, but were still below their year ago levels and way behind their peak of September-October. In Asia, offers ran up as market atmosphere warmed up after the holiday, with sellers keen to hike offers, which, were taken by in a cautious way downstream buyers. PetroChina Jilin Petrochemical raised its February offer price as domestic spot prices gained slightly after the Lunar New Year on the back of healthy downstream demand.
In Europe, INEOS Nitriles declared force majeure at its Seal Sands acrylonitrile plant in UK, ahead of a planned 35-day turnaround scheduled in early May. The production cut asserted upward pressure on prices following the end of the New Year holiday, after which demand for typically increases in Asia. The outages coincided with an ongoing turnaround at Formosa’s plant in Mailiao, Taiwan that began earlier in the week. In US, unexpected supply disruptions added upward pressure on export prices. The combination of tight supply and steadily increase in demand is likely to push prices higher in the near term.
Acrylic staple fibre markets were stable in Asia, as upstream acrylonitrile cost rose, while downstream demand was yet to fully recover in China. The industry run rate dropped to 67% during the week, as some units in northern regions of China remained idle, and thus supply decreased somewhat. Jilin Chemical Fiber slashed its overall operating rates at its three units amid increasing costs of acrylonitrile. One plant was taken offline while other two ran at lower rates.
Demand was poor as downstream yarn mills largely remained closed post-holiday break. In India and Pakistan, acrylic fibre prices remained unchanged during the week as upstream cost increased and trading activities in downstream was lackluster. Overall, acrylic fibre market may face mounting cost pressure, unless some supporting factors emerge in coming weeks.
Source: Global Markets Weekly Review
