Acrylonitrile market in China has room to drop
The Acrylonitrile (AN) market in China has room to fall going forward. As Sailboat began operations at its new plant and several other new facilities for AN are expected to start up soon, supply is likely to increase in the future. AN makers maintain their operating rates at high levels since they could secure enough profit margins with their existing facilities. On the other hand, ahead of the Lunar New Year in early February, AN demand is receding.
In Ningbo in South China, with the spread of COVID-19, perceptions of tight supply for AN emerged in some areas. The market for ABS, a derivative from AN, had temporarily risen but ABS maker eventually lowered their selling prices ex-factory since demand was not strong and feedstock costs fell.
Meanwhile, in the market for feedstock of AN, propylene prices are staying firm. Owing to maintenance at several propylene facilities in China, there are few domestic lots for sales. Further, high import prices for propylene are also cited as a bullish factor.