Acrylonitrile Market Still Tight on Demand Outpacing Supply, All Eyes on the Peak Demand Season
- 12-May-2021 2:00 PM
- Journalist: Robert Hume
Acrylonitrile (ACN) market has sustained tightness across the globe as we move into the second half of Q2, although supply dynamics have improved as compared to February and March.
Supply fundamentals in the US have shown improvement as the country recovers from production issues arising from the February freeze fallout. However, some force majeures are still in place for ACN on the US Gulf Coast which have limited the availability of any spot material despite robust end-use demand. Inventories were pointed out as critically low as manufacturers braced up for the upcoming peak demand season and hurricane season which is scheduled towards the end of Q2 and H1 of Q3.
Demand for ACN has gained paced in the last few weeks as US steps out from the pandemic-induced slowdown on the back of strong vaccination drive. Consumer demand for the downstream Acrylonitrile Butadiene Styrene (ABS) and synthetic fibres is high, considering improved factory run rates.
Acrylonitrile prices in Asia, the US and Europe have slipped from the peaks observed in March, but values are still historically high. As per ChemAnalyst price intelligence, the price of Acrylonitrile was assessed at USD 2550 per ton FOB Texas in the week ending 7th May, showing marked eases from the USD 2750 per tonne levels observed during the same period in April.
Adding to increased Acrylonitrile offers is the high cost of feedstock Propylene whose prices are on an upwards rally since the last two weeks due to strong demand outstripping the available supply. The supply of Propylene is expected to ease as refinery rates are improving with reportedly increased gasoline production and better cracker throughput rates. However, the improvement in market supply will remain subjected to no further supply disruptions in the future.
While the overall ACN market maintains tightness, the demand-supply picture seems to show improvement in Q2 as compared to Q1. Given no further supply chain disruptions scheduled as of now and robust ABS and Acrylic Fibre demand, the market is heading towards its peak consumption levels and prospects are positive. However, it seems that suppliers would take some time to clear the huge backlog of orders.