Vinyl cyanide prices have continued to decline since February

According to the Commodity Market Analysis System of SunSirs, as of June 7th, the bulk vinyl cyanide price in the market was 8,212 RMB/ton, a decrease of 23.96% from the high point of 10,800 RMB/ton in February; Compared to 9,600 RMB/ton at the beginning of the year, it had decreased by 14.45%. On the one hand, the price of raw material propylene slightly increased at the beginning of the year, and in addition, downstream construction resumed after the holiday, leading to a slight recovery in the vinyl cyanide industry; Later, with the production of 330,000 tons/year of new units and weak demand for raw materials, the vinyl cyanide market fell. In May, as costs and demand further weakened, the vinyl cyanide market showed a rapid and significant downward trend.

In the short term, the supply of vinyl cyanide will continue to be loose, and there are still many plans for the production of units in the future

Since 2023, the vinyl cyanide industry has added another 330,000 tons/year of new units, and the industry's operating rate remained at 70-80%. Although some companies have shut down to reduce their load during the cycle, overall, the pressure on the supply side of vinyl cyanide has continued since the beginning of this year.

Recently, the price of vinyl cyanide dropped significantly, and some units were planned to be shut down for maintenance. Although the supply of vinyl cyanide will slightly decrease in the short term, the overall situation is still relatively loose (Daqing Petrochemical's 80,000 tons/year vinyl cyanide unit is planned to be repaired from June 10th to the end of July. Lanzhou Petrochemical's 35,000 tons/year unit is planned to be shut down for maintenance from late June to the end of July). In the coming years, there are still nearly 3 million tons/year of planned production of vinyl cyanide units, and in the medium to long term, the supply of vinyl cyanide will continue to increase.

There is little room for a significant rebound in raw material prices in the short term, and the cost support for vinyl cyanide is weak

Since 2023, the price of raw material propylene has decreased, and the cost of vinyl cyanide has significantly declined. According to the Commodity Market Analysis System of SunSirs, as of June 7th, the domestic propylene price was 6,325 RMB/ton, a decrease of 12.68% from the 7,244 RMB/ton at the beginning of the year; Compared to the high point of 7,695 RMB/ton in the cycle, it has decreased by 17.80%. In the short term, Tianhong Chemical's PDH device is expected to increase load, coupled with the planned restart of Shandong MTO's early maintenance device, the pressure on the supply side of propylene continued, and there is little room for a significant rebound in prices. The cost support for vinyl cyanide continued to be weak.

Downstream atmosphere is sluggish, and the demand side is weak and difficult to improve in the short term

Since 2023, the prices of downstream products of vinyl cyanide have declined to varying degrees, and ABS, one of the main downstream products of vinyl cyanide, has dropped to below 85% since the start of construction in May; After entering May, some acrylic fiber factories in Northeast and East China were shut down for maintenance, and the construction of the acrylic fiber industry continued to decline to below 50%; The acrylamide industry was operating at around 70%; The demand support for vinyl cyanide continued to weaken; From June to July, some enterprises of Acrylonitrile-butadiene rubber were planned to stop for maintenance, and the commencement of Acrylonitrile-butadiene rubber will decline to a certain extent. On the whole, the downstream demand support for vinyl cyanide is weak in the short term and difficult to change. In the medium and long term, the ABS industry, one of the main downstream vinyl cyanide industries, has a large number of production capacity plans in the future, which may have some support for vinyl cyanide. It is understood that by 2026, the new capacity of Vinyl cyanide butadiene styrene in China will exceed 5 million tons/year.

Market outlook

SunSirs’ vinyl cyanide analysts believe that in the short term, both cost, supply, and demand sides are showing weakness, with the vinyl cyanide market mainly experiencing weak consolidation in the short term; However, with the significant decrease in prices and the significant compression of vinyl cyanide profits, the vinyl cyanide market may stop falling and stabilize. In the medium to long term, the vinyl cyanide market will fluctuate with the time difference between the production of its own devices and downstream devices.

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