Latest Market Condition of Acrylonitrile in China

There are two steps in the production of polyacrylamide

There are two steps in the production of polyacrylamide

Monomer production technology: in the production of acrylamide monomer, acrylonitrile is used as raw material, and the crude product of acrylamide monomer is formed by hydration under the action of catalyst. After flash evaporation and refining, the refined acrylamide monomer is obtained, which is the raw material for the production of polyacrylamide.

Acrylonitrile + (water catalyst / water) → synthesis → crude acrylamide → flash distillation → refining → refined acrylamide

Whats the market situation of crylonitrile in China market

More than 2.23 million tons of acrylonitrile will be put into operation within three years, and there will be surplus acrylonitrile in China.

Sierbang Phase II propane industrial chain project began in Lianyungang, Jiangsu Province, Phase II of 260000 T/a acrylonitrile project in Shandong Korur, 1.35 million T/a PE/2.19 million T/a EOE/260 000 t/a acrylonitrile integrated satellite unit Petrochemical Company, and complete development of 200000 t/acrylonitrile/70,000 t MMA CNOOC project, etc. The most news about acrylonitrile this year is that the building of new plants has begun.

With the continuous advancement of science and technology, the acrylonitrile industry is posing many significant developments: first, the production line of acrylonitrile with propane as raw material is steadily being promoted; second, research into new catalysts continues to be the focus of research by scholars at home and abroad; and third, a large-scale unit. In the future, the manufacturing capacity of acrylonitrile will increase dramatically, while import volume and demand will not shift significantly. The market pressure will be great and the competition will be intensified, so the prospect will be worrying.

The price dropped again and again, breaking the record low of almost ten years.

After the beginning of this year, the acrylonitrile demand has started to drop, with prices dropping from 12,000 yuan per ton to 6300-6700 yuan per ton, a new low in 10 years. At the same time, producers are in a loss condition, with a commodity loss of 1000-2000 yuan/ton, which has been unusual in recent years.

Poor downstream demand is also a crucial factor in the suppression of the market. As the most important downstream of acrylonitrile in China, affected by the epidemic crisis, the domestic ABS plant still operates below 60 per cent, and its demand is obviously declining; the market for acrylic fiber is beginning to fluctuate marginally around 50 per cent, and some small and medium-sized downstream enterprises are continuing to operate one after the other, but the start-up is not strong. In addition, the general consumer mindset is empty, and the appetite for restricting sales is not strong, so we can be patient and wait-and-see. Therefore, it is difficult for the market to ship goods, which leads to the price falling again and again, breaking the new low of nearly ten years.

Second output limitation of the acrylonitrile industry to minimize inventory pressure

Affected by the COVID-19, the global acrylonitrile demand is on a declining trend and there is no successful breakthrough in the short term. In addition, the price of upstream propylene is forecast to remain above 6000 yuan/tonne and the cost burden would make the plant difficult. The acrylonitrile plant started to issue maintenance plans in mid-April. As the deficit worsened, the maintenance schedule for the acrylonitrile plant was revised in May and the operating rate of acrylonitrile decreased to 55%.

At the beginning of August, the domestic acrylonitrile unit again began consolidated maintenance and supply reduction, which was the second major overhaul in 2020, which was also unusual in previous years. This often demonstrates the direct production strain of the acrylonitrile industry.

Since the start-up of phase 2 of Sierbang in 2019 and the commissioning of Zhejiang Petrochemical Company this year, it is obvious that the operating rate began to decline. The frequency of production reduction or maintenance is gradually increasing. And in 2021-2022, more acrylonitrile units will be put into operation, which means that the industry will enter into the situation of excess supply.

The growth in acrylonitrile exports continues

Mainly, China has always been importing acrylonitrile. Until 2018, the export value of acrylonitrile had been almost zero. However, with the rise in domestic acrylonitrile processing capacity, there has been an increase in the contradiction between domestic supply and demand. Exports have become common in recent years and have become the primary way to alleviate domestic supply pressure.

Until 2019, there was a limited supply of domestic acrylonitrile, so the export amount was still very limited. However, with the successful commissioning of phase II of Sierbang in 2019 and the successful commissioning of the Zhejiang Petrochemical Plant in 2020, domestic supplies will improve dramatically. However, owing to the closure of such units, there is a supply deficit in the foreign market, such that domestic goods are granted export opportunities.

In addition, the external price is reasonably high throughout the year 2019-2020, which also offers a decent window for export arbitration. At the same time, the 280,000-ton Ineos unit in the United Kingdom has also announced that it will permanently cease production by 2020. The flow of foreign goods will change in the future, and China’s impact on the export market will steadily grow.

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