Market Overview: In the last trading week before the holiday, the tight supply continued, and the shortage situation on the market did not improve. The quotes of major manufacturers continued to rise, but as the Spring Festival approached, some downstream manufacturers stopped work and had holidays, coupled with logistics shutdowns, the domestic acrylonitrile market trading stagnated, and there was no market for prices on the market. As of January 23rd, the mainstream negotiation for container self pickup in East China ports is around 11600-11800 yuan/ton, and the negotiation for short distance delivery in Shandong market is around 11500-11700 yuan/ton.

Supply shortage: Zhejiang Petrochemical’s 520000 tons/year acrylonitrile plant has resumed two sets of operation in mid January. Currently, the overall operating load is around 90%. Shandong Lihuayi’s plant has maintained 50% operation after an unexpected shutdown, and there is a full shutdown maintenance plan in February. Selbang has also maintained low load operation due to partial production line maintenance. At the same time, the production time of Zhenhai Refining and Chemical is not yet clear, and the tight supply is still driving the market to explore. The inventory of the enterprise remains low, and currently it is mainly supplied by contracts. The spot resources are continuously scarce, and the shortage situation is difficult to improve in the short term.

Reduced demand: The main downstream industries of acrylonitrile have all shown losses, coupled with the approaching Spring Festival, some small and medium-sized downstream factories also have plans to shut down and have holidays. Pre holiday stocking has basically ended, which may drag the market to continue to rise.

Cost aspect: Propylene is the main raw material for acrylonitrile production, so fluctuations in propylene prices will directly affect the production cost of acrylonitrile. When the price of propylene rises, the production cost of acrylic acid also increases accordingly. In order to maintain profit levels, acrylonitrile producers usually increase their selling prices, and vice versa. As of January 23rd, the mainstream price of propylene in Shandong region is 6835 yuan/ton, with average cost support.

Market forecast: Currently, the market supply increment is still limited in the short term, with main factories maintaining contract supply as the mainstay, and spot resources remaining scarce. However, with the recent rapid rise in prices, downstream users also have resistance, and some small and medium-sized downstream factories have plans to shut down and take a holiday near the Spring Festival. However, they are optimistic about the future market and expect a bullish outlook for the year ahead.