Price trend
This week, the domestic vinyl cyanide market remained stagnant and stable. The upstream raw material propylene market was fluctuating and consolidating, with average cost support. In recent times, downstream demand had continued to be weak, and there was sufficient supply of vinyl cyanide on the market. However, under low profits, vinyl cyanide factories had a clear willingness to raise prices. Therefore, the focus of transactions in the vinyl cyanide market had not changed much this week, and many businesses mainly maintained their previous quotations, still maintaining a cautious attitude towards the future market. As of the weekend, the mainstream negotiations for self delivery in East China ports had remained around 9,450 RMB/ton.
Analysis review
From the perspective of the raw material propylene market, the domestic propylene market mainly experienced a decline followed by an increase, with a narrow range of fluctuations. In the first half of this week, the propylene market peaked and fell, with weak support for subsequent positive fundamentals. Supply gradually increased, and downstream demand was cautious. The pace of purchasing weakened, and local inventory pressure increased. Production enterprises had a strong willingness to ship and release inventory, which stimulated transactions. In the latter half of the period, international crude oil and polypropylene futures had strengthened, boosting market sentiment. Downstream stocks had been replenished on dips, and market trading had improved. Production enterprise inventories and shipment pressures had caused the market to stop falling and rebound. However, overall, the clear guidance on fundamentals was limited, and operators operate cautiously, resulting in a narrow range of market fluctuations.
From the downstream ABS market perspective, the domestic ABS market had experienced slight fluctuations and gains this week. At the end of June, styrene closed sharply higher, coupled with increasing news of ABS petrochemical manufacturers reducing production. The atmosphere of speculation on the market became stronger, and some buyers entered the market in moderation, resulting in improved transactions. And with the actual invoice prices of ABS petrochemical manufacturers gradually increasing, the sentiment of merchants to support prices had increased, and market prices had mostly risen. However, downstream demand was still in the off-season, and the digestion of goods was slow. This transaction was mostly made by broker, and the operators were more cautious in trading. The market growth was limited, and only a few materials and goods were tight and the upward trend was more obvious. The average operating rate of domestic ABS equipment this week was 64.94%, a decrease of 0.41% month on month and 11.89% year-on-year.
Market outlook
Overall, the domestic propylene market will mainly consolidate after a rise next week, with insufficient cost support. Coupled with the restart of the Corolla’s 260,000 tons/year plant, northern supply will increase, and the domestic vinyl cyanide market price expectation is expected to weaken slightly. However, the release of supply increment is limited in the short term, and the overall inventory of factories is expected to be controllable. Coupled with the remaining cost pressure, there is not much room for market weakness. It is expected that the mainstream negotiated price for self pickup in East China ports will be around 9,350 RMB/ton.
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