In the last week of August, the domestic acrylonitrile market ended its nearly four month decline and rebounded from the bottom. The mainstream self pickup price in East China ports quickly rose from 8050 yuan/ton to around 8550 yuan/ton, with a two-day increase of 6.2%. The main reason for this rebound comes from the supply side, with major factories in East China reducing their equipment load. Due to the long-term unilateral decline of acrylonitrile prices in the early stage, which resulted in historically low levels, coupled with the worsening loss situation of individual products, there was a strong sentiment of buying and replenishing at the bottom of the market, and buying orders quickly followed suit.

Supply reduction

The capacity utilization rate of the acrylonitrile industry has decreased from around 75% last week to around 66% currently.

After overcapacity in the acrylonitrile industry, the impact of supply changes on market trends becomes more direct, that is, the negative correlation between capacity utilization and prices is significantly strengthened.

Cost support

The continuous increase in cost pressure is also an important factor supporting the rapid rebound of acrylonitrile market prices in this round.

Since late June, the production profit of acrylonitrile single products has shown negative performance, and the loss situation has gradually worsened. Acrylonitrile manufacturers in some MMA co production facilities can still maintain normal production, but other enterprises are facing severe pressure of losses. Therefore, manufacturers have a particularly strong intention to raise prices, and there is some positive support on the news side, making the enthusiasm for pushing up prices more obvious.

However, the acrylonitrile market only continued to rise for 2-3 days this week, and then returned to calm again. On the one hand, there has been no further improvement in overall downstream demand, and buying orders have quickly resumed the pace of immediate demand after a moderate replenishment of positions; On the other hand, although the industry’s capacity utilization rate has significantly decreased, the industry’s inventory still needs to be digested, and the overall supply is still abundant.

market prediction

At present, the acrylonitrile market needs to continue waiting for further positive news support to emerge. Overall, supply may still be reduced, and demand will gradually improve in September. Therefore, the market is prone to rise but difficult to fall in the short term. However, considering the continuous existence of supply variables under the background of overcapacity, the upward space in the market is still difficult to expand, and it may be difficult to break through the 9000 yuan/ton mark in the short term.

The acetone market continued to decline in August, reaching a new low for the year. According to the analysis system of Business Society, the average daily price of acetone in the national market has dropped from 6975 yuan/ton on August 1st to 6362.5 yuan/ton on August 31st, a decrease of 8.78%, compared to 7062 yuan/ton at the beginning of the year, a decrease of 9.91%. From the perspective of the acetone market in East China, the price of 6750 yuan/ton quoted on August 1st fell to 6150 yuan/ton quoted on August 31st, a decrease of 8.89%. Throughout the year to present, the domestic acetone market has shown a trend of first rising and then falling.

From a supply perspective, the inventory at Jiangyin Port has remained at 25000 to 35000 tons, reaching a high level since the beginning of the year. There will continue to be imports and domestic trade shipments arriving to replenish the inventory. It is understood that the import sources are mainly from South Korea, Saudi Arabia, and Thailand, and it is not ruled out that the high level at the end of the month will continue.

From a cost perspective, pure benzene showed a significant decline at the beginning of the month due to weakened support from the cost side, slow inventory digestion, obvious accumulation of inventory, significant resistance to shipment from petrochemical enterprises, and pressure to digest contract sources. Under multiple pressures, traders had to lower prices to ship.

From the demand side, the top two downstream industries have relatively stable production, with bisphenol A production at 60% and acetone cyanohydrin MMA production at 50%. The overall production of bisphenol A and MMA downstream is stable, with limited export orders for isopropanol and domestic facilities maintaining a level close to 50%.

After a wide decline in the acetone market, the operating rate of phenol ketone factories remained high at the end of the month, and the import contract goods arrived at the port normally, with sufficient supply. Traders still have shipment pressure; From the demand side, solvent terminal factories have seen an increase in demand for acetone as the weather cools down. Currently, acetone has bottomed out, making it a good time for the demand side to restock. In September, there will be a demand for stocking during the Double Festival holiday, and Business Society expects that trading will improve in the later period.

Ethylene glycol prices rise in the second half of August

The price of ethylene glycol rose in the second half of August. According to data from Shengyi Society, as of August 29th, the average price of domestic oil to ethylene glycol was 4663.33 yuan/ton, an increase of 1.97% from August 20th. The prices in each region are as follows:

The spot price range for mainstream manufacturers in East China is 4600-4795 yuan/ton; The spot price of ethylene glycol in the South China market is 4600 yuan/ton.

On August 29, 2024, the basis of the spot contract for ethylene glycol at the port was close to low and far from high. The paper cargo basis quotation for the 01 contract this week ranges from 0 to+2; The basis of forward contracts is relatively strong, with a basis price of 15-20 yuan/ton in September. Recently, the basis has strengthened.

On August 29th, the price of coal to ethylene glycol remained basically stable, with a domestic price range of 4200-4330 yuan/ton, including taxes.

On August 28, 2024, the external price of ethylene glycol was as follows: the landed price in China was $560/ton, and the landed price in Southeast Asia was $556/ton. The domestic landed price has slightly increased compared to the 22nd.

Reasons for the rebound in ethylene glycol prices this week:

1. The amount of imported ethylene glycol arriving at the port has decreased

Last week, there was a concentration of goods arriving at the port, resulting in accumulated inventory data. However, this week’s expectations for the port have declined, leading to a decrease in inventory data. As of August 29, 2024, the total spot inventory of ethylene glycol in the main ports of East China was 673300 tons, a decrease of 10900 tons from the total spot inventory of ethylene glycol in the main ports of East China on August 22, which was 684200 tons..

2. Supply side negative load reduction and expected increase

On the supply side, the scale of production reduction in ethylene glycol plants has recently expanded, partly due to the favorable price difference of EO conversion, achieving production capacity conversion, and partly due to planned shutdown and maintenance. On the demand side, downstream demand is expected to be strong during the peak season, with a turning point in the peak season for gold and silver, and a slight rebound in downstream operating rates.

Recent Developments in Ethylene Glycol Plant

Northern Chemical will restart at the end of the month, while coal production facilities such as Shenhua Yulin and Henan Coal Industry will be shut down, and 830000 tons of coal from overseas markets in the United States will be shut down due to unforeseen circumstances.

Future expectations

At present, the absolute amount of explicit inventory in ports is still relatively low. This provides some support for the price of ethylene glycol.

It is expected that the price of ethylene glycol will experience strong fluctuations in the short term, but the price ceiling will narrow.

1、 Price trend

According to the Commodity Market Analysis System of Shengyi Society, the average price of ammonium sulfate in the domestic market was 921 yuan/ton on August 1st, and 913 yuan/ton on August 28th. The market price of ammonium sulfate has dropped by 0.90% this month.

2、 Market analysis

The market price of ammonium sulfate first fell and then rose in August. In the first half of August, the market price of ammonium sulfate weakened and declined. The operating rate of coking enterprises is relatively low, while the operating rate of internal level enterprises is relatively high. The enthusiasm for market procurement has weakened, and on-site trading is weak. The granule factory has a large inventory and the shipping market is not good. The export market for ammonium sulfate has not improved, and the confidence of exporters has been dampened. In the second half of August, the market price of ammonium sulfate fluctuated and rose. The operating rate of coking enterprises is relatively low, and some enterprises have limited production. The operating rate of internal level enterprises has also decreased. Downstream inquiries have increased, the focus of ammonium sulfate transactions has shifted upward, and market prices have risen. As of August 28th, the mainstream ex factory quotation for coking grade ammonium sulfate in Shandong region is around 890 yuan/ton. Domestic grade ammonium sulfate, the mainstream ex factory quotation in Shandong region is around 900-930 yuan/ton.

According to the weekly K-bar chart from June 3, 2024 to August 19, 2024, it can be seen that the domestic ammonium sulfate cycle is fluctuating. Ammonium sulfate experienced a significant decline in August, with the largest drop occurring in the week of August 12th at -1.82%.

3、 Future forecast

An ammonium sulfate analyst from Shengyi Society believes that downstream demand is still acceptable in recent days, market inquiries have increased, and on-site trading is good. At present, export expectations are positive, and the price of ammonium sulfate has slightly increased. It is expected that in the short term, the domestic ammonium sulfate market prices will remain stable with a moderate upward trend.

The tight supply of goods continues to drive the phenol market higher. On the 27th, Sinopec once again raised the listing price of phenol. The listing price of phenol in Sinopec East China is 8700 yuan/ton, and the listing price of phenol in Sinopec North China is 8700-8750 yuan/ton. The tight supply in the market continues to be positive, with traders showing strong sentiment towards price increases and factories taking advantage of the situation to raise prices. However, the terminal market is cautious in chasing price increases, with some urgent needs mainly being replenished, and there is insufficient follow-up on trading.

On the 27th, due to the wide upward trend of crude oil, the market price of pure benzene in East China was relatively strong, with pure benzene prices ranging from 8480-8550 yuan/ton. The atmosphere between buyers and sellers has been tense in recent months, but there has been a significant upward trend in the far months. Shandong region has been listed for price increase due to cost support. The cost is supported by favorable downstream phenol.

The phenol offers in various markets across the country on August 27th are as follows:

East China region: 8750, up 50

Shandong region: 8750, up 50

Surrounding areas of Yanshan: 8700, up 50%

South China region: 8780, up 50

The current phenol market is mainly affected by supply and demand, and short-term futures will continue to be tight. The operating rate of phenol ketone factories will increase in September, and the focus should also be on the replenishment of imported goods. Business Society expects phenol to continue to operate steadily in the short term, and pays attention to market transactions.