Price trend

After the holiday, the spot market price of vinyl cyanide in China continued to rise. During the Spring Festival, the entire LihuaYi plant was shut down for maintenance, and the industry's capacity utilization rate once again declined. Spot resources remained tight, and the quotes of major manufacturers continued to rise. Intermediaries were also reluctant to sell at high prices, and some traders had no offers due to stock shortages. As of February 7th, the mainstream negotiation for container self pickup in East China ports was around 11,800-12,000 RMB/ton, and the negotiation for short distance delivery in Shandong market was around 11,700-11,900 RMB/ton.

Analysis review

Supply shortage: The 260,000 ton/year vinyl cyanide unit of LihuaYi Lijin Refining and Chemical was shut down for maintenance for one month starting from February 1st, and is scheduled to resume by the end of February or early March; In addition, there was still a maintenance plan to maintain low load operation in February, and coupled with the lack of specific start-up time for the new plant of Zhenhai Refining and Chemical, the tight supply was still driving the market to explore further. There was no pressure on industry inventory, and contract supply was temporarily the main source. Spot resources continued to be scarce, and the shortage situation is difficult to improve in the short term.

Stable demand: Although the three main downstream industries of vinyl cyanide were temporarily in a loss making state, and most of the inventory has been completed before the Spring Festival, production reduction and shutdown were relatively limited, so the demand side was still relatively stable.

Cost side: International oil prices continued to decline, which was bearish for the market sentiment. And as of February 6th, downstream centralized replenishment has ended, and enterprise shipments were tending to be flat, which had a certain degree of suppression on price trends. As of February 6th, the market price of propylene in Shandong was 6,980 RMB/ton, with average cost support.

Market outlook

Overall, the domestic vinyl cyanide market remained strong at a high level, with no pressure on industry inventory. In the short term, spot resources were still tight, and major manufacturers continued to raise prices. However, post holiday buying has not fully recovered, and downstream users are also resistant to high raw material prices, which also poses resistance to market growth.

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