Rising Inflation and Mixed Demand Increase European Acrylonitrile Prices
- 21-Nov-2022 5:03 PM
- Journalist: Jacob Kutchner
As per the latest data, Acrylonitrile prices in Germany, France, Belgium, and the Netherlands have consistently increased for the past few weeks. Recently Acrylonitrile's prices in Germany settled at USD 1580/MT after witnessing an increase of almost 4% in the last week's discussions of October month. At the same time, there was no significant improvement in demand for Acrylonitrile from the downstream Acrylonitrile Butadiene Styrene rubber. In comparison, Acrylonitrile's demand was firm from elastomer Nitrile Butadiene Rubber and acrylic fiber producers. However, there was no increment in the new orders due to high inflation in the European region. Simultaneously, with ease in the Natural gas costs from the previous months, Eurozone PMI increased slightly during October 2022.
High inflation and strong energy costs amid looming energy crises, especially after the blast at Nord 1 stream pipeline on 26th September 2022 that carries Natural gas from Russia to Germany, increased the variable costs on the production values. On top of that, energy surcharges by the European producers further advanced the upward cost pressure.
Earlier, around one-third of Acrylonitrile's key feedstock ammonia production units in the European region were shut down due to weak demand from the downstream industries. As per sources, Ammonia production was revamped in October, while natural gas demand remained depressed in the European commercial sector. Consequently, feedstock Ammonia prices decreased appreciably in Germany, reducing the upstream cost pressure on the Acrylonitrile prices.
According to ChemAnalysts, Acrylonitrile demand is anticipated to be mixed sentiment from the downstream industries in the future. Due to demand from end-users during winter, orders may improve from acrylic fiber producers. On the contrary, demand will remain weak from the nitrile rubber producers. While production rates will remain moderate due to the energy crisis as Government has asked industries to cut down their electricity use to save electricity for the domestic sector during winter months.