Asia ACN supply to tighten; China active in export discussions

04:35' PM - Tuesday, 21/01/2020

Supply of February-loading acrylonitrile (ACN) cargoes in Asia is expected to be tight, partly due to an upcoming turnaround in Taiwan and a production outage in Thailand.

China, which is a net ACN importer, is recently active in export discussions as domestic availability has improved following restarts of major facilities in January.

In the week ended 17 January, ACN prices were assessed at an average of $1,385/tonne CFR (cost & freight) China, down $5/tonne from the previous week, according to ICIS data.

In east China, domestic prices of the material declined by an average of yuan (CNY) 250/tonne ($36/tonne) ex-tank over the same period to CNY10,400-10,500/tonne, the data showed.

Supply in the Chinese domestic market was tight in January but has since improved as plants have resumed operations.

Sinopec Anqing Petrochemical’s plant with a 210,000 tonne/year ACN capacity restarted on 4 January after a prolonged shutdown from 1 November 2019; while Jiangsu Sailboat Petrochemical’s 260,000 tonne/year capacity restarted on 14 January, according to market sources.

Expectations of sufficient supply in China in February, after the Lunar New Year holidays weighed on market sentiment.

The Lunar New Year, which falls on 25 January this year, is celebrated in most parts of northeast and southeast Asia. China will be on holiday for a full week from 24 January.

In Thailand, PTT Asahi Chemical’s 200,000 tonne/year plant had an outage from 24 December 2019 to 6 January 2020, owing to power supply issues at its utility supplier.

In Japan, there are concerns that Asahi Kasei’s ACN plant may be affected by upstream issues in Mizushima.

In Taiwan, Formosa Plastics Corp has a scheduled turnaround at its ACN facility in February.

In the Indian market, which is active in ACN imports, spot prices have declined given better availability of offers for February-loading cargoes largely coming from China.

Downstream acrylic fibre makers in India are facing steep competition from imports due to weak demand in Europe and Asia. Their margins were being squeezed as they struggle to maintain their sales competitiveness and volumes.

For ACN makers in Asia, margins have remained at a healthy range despite strong prices of feedstock propylene.

On 17 January, the current ACN margin is estimated at $246.50/tonne CFR NE (northeast) Asia, well above the breakeven level of $150/tonne.

ACN is used in the production of synthetic fibres for clothing and home furnishings, engineering plastics and elastomers. - ICIS -

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