The reduction in acrylonitrile ex-factory prices is introducing a new variable into the upstream chemical fiber supply chain. On July 8, Sinopec East China Sales Company lowered its acrylonitrile listing price by 250 yuan per ton to 9,450 yuan per ton, affecting two major production bases: Zhenhai Refining & Chemical and Anqing Petrochemical. This adjustment is not an isolated price move; it reflects the combined effect of easing upstream costs and weak downstream demand.
Background
The core of this price adjustment lies in the manufacturer's initiative to reduce prices. As one of the major suppliers of acrylonitrile in China, Sinopec East China Sales Company's listing price directly guides the spot market. Although a 250 yuan per ton reduction is not drastic in absolute terms, the signal it sends is noteworthy given the overall pressure on chemical fiber raw materials. Acrylonitrile is a key feedstock for acrylic fiber, ABS resin, carbon fiber, and nitrile rubber, and its price changes propagate along the supply chain. According to industry public data, the price of propylene, a primary raw material for acrylonitrile, has remained low recently, weakening cost support. Meanwhile, operating rates in downstream acrylic fiber and ABS sectors have not shown significant recovery, with demand lacking effective pull, leading to a supply-demand imbalance that pushes prices down.
Industry Impact
For acrylic fiber producers, the reduction in acrylonitrile prices directly lowers production costs. Based on industry consumption rates, a 250 yuan per ton drop in acrylonitrile reduces acrylic fiber costs by approximately 230-240 yuan per ton, potentially improving profit margins. However, it is important to note that the downstream sectors for acrylic fiber—including wool-blend fabrics and knitted yarns—are currently in a traditional off-season, with weak end-order demand. Whether the cost reduction can translate into profit improvement depends on enterprises' procurement pace and inventory management.
The ABS resin industry also benefits from the acrylonitrile price drop. ABS is made from acrylonitrile, butadiene, and styrene, with acrylonitrile accounting for about 20%-25% of its cost. This adjustment will directly lower ABS production costs, providing cost relief to downstream applications such as home appliances and automotive parts. However, the ABS market is also facing a loose supply-demand balance, and the cost-side benefit may be more absorbed by price competition.
The impact on the carbon fiber sector is more medium- to long-term. Acrylonitrile is the core raw material for carbon fiber precursors, and its price fluctuations directly affect carbon fiber production costs. This reduction helps ease raw material procurement pressure for carbon fiber companies, particularly enhancing cost competitiveness for civil-grade carbon fiber used in wind turbine blades and sports equipment. However, carbon fiber companies typically use long-term contracts for acrylonitrile procurement, limiting the immediate impact of spot price fluctuations on actual procurement costs.
From a market sentiment perspective, Sinopec East China's price adjustment has heightened cautiousness in the spot market. Some traders and downstream users have suspended large orders, waiting for further price clarity. This 'buy on rising, not on falling' mentality is common in chemical fiber raw material trading and may lead to a short-term contraction in spot transaction volumes, putting further downward pressure on prices.