Acrylonitrile Price Weakens: Fushun Petrochemical Cuts by 600 Yuan/Ton, Supply Contraction Fails to Offset Weak Demand

The acrylonitrile market has received a fresh price signal. On July 6, Fushun Petrochemical cut its listing price for acrylonitrile by 600 yuan per ton, setting it at 9,700 yuan per ton. This adjustment indicates that the spot price center has further shifted downward, exerting a generally bearish impact on market sentiment.

Background

Behind this price cut, the supply side has not been idle. Fushun’s 92,000-ton-per-year acrylonitrile unit has been shut down since early March and has not resumed operations. In other words, despite a clear reduction in supply, the company still chose to lower the listing price, reflecting that demand weakness has outweighed the support from supply contraction.

From an industrial chain perspective, the main downstream sectors for acrylonitrile include acrylic fiber, ABS resin, acrylamide, and nitrile rubber. Recently, the recovery of textile end-demand has been slow, with acrylic fiber plants operating at low rates. The ABS industry is also facing insufficient orders from home appliances and automobiles. Downstream buyers are mostly restocking on a need-to basis, with little willingness to build inventories, leading to persistently thin spot trading.

Industry Impact

For upstream acrylonitrile producers, the current price is approaching the breakeven point for some high-cost units. After Fushun’s unit was idled, its pricing strategy now reflects actual market transaction levels rather than cost drivers. Industry data shows that China’s total acrylonitrile capacity is around 3 million tons per year, but the average operating rate has fallen from over 80% at the start of the year to about 65%, with some small and medium-sized units forced to cut production or shut down due to losses.

For downstream buyers, this price cut means a temporary reduction in raw material costs. However, the downward trend may not be over. If demand from key downstream sectors—acrylic fiber and ABS resin—does not pick up significantly during the traditional peak season in the third quarter, acrylonitrile prices could continue to fall, potentially breaking below the 9,500 yuan per ton threshold.

For traders, the current market is characterized by "supply reduction but even weaker demand," increasing inventory management risks. Traders holding high-cost inventories face losses, while tight spot liquidity makes quick sales difficult. The market’s focus has shifted from supply to the pace of demand recovery.

Practical Recommendations

For Buyers - Control raw material inventory cycles and avoid large-scale stockpiling during a downward price trend; maintain a safety stock of 15-20 days. - Monitor the operating rate recovery of acrylic fiber and ABS industries in the third quarter; if the rate rebounds above 70% for two consecutive weeks, consider increasing forward orders with price locks.

For Foreign Trade Companies - The current narrowing of the spread between domestic and international acrylonitrile prices limits export competitiveness; focus on maintaining existing clients rather than aggressively entering new markets with low-price strategies. - Keep a close watch on RMB exchange rate fluctuations; if the rate depreciates significantly, consider signing short-term export contracts to leverage the exchange rate advantage and hedge against raw material price volatility.