SunSirs: Driven by Rising Costs, Vinyl Cyanide Prices Edged Up slightly

This week, persistent shortages in overseas supply kept international vinyl cyanide prices at elevated levels, providing continued support for export markets. Domestically, however, consumption continued to contract; spot market buying interest remained weak, resulting in sluggish transaction activity. Driven by strong price trends in the upstream propylene market—the primary feedstock—vinyl cyanide prices saw a modest upward adjustment. As of May 8, the prevailing ex-tank pickup price at East China ports stood at 10,900–11,100 RMB/ton—an increase of 100 RMB/ton compared to last week's range of 10,800–11,000 RMB/ton. Similarly, in the Shandong market, the price for short-haul delivered goods rose by 100 RMB/ton to 10,650–10,750 RMB/ton, up from last week's range of 10,550–10,650 RMB/ton.

Increased Supply:

During the week, CNOOC Fudao (Hainan) resumed production on one line of its 200,000-ton/year vinyl cyanide facility. Consequently, the industry's capacity utilization rate rose, leading to an increase in supply. According to statistics, as of May 7, the weekly capacity utilization rate among domestic vinyl cyanide plants stood at 65.12%, an increase of 1.11 percentage points from the previous period; weekly output was approximately 76,000 tons, up 1,300 tons from the previous period. Although supply remained at a relatively low level throughout the week, inventory levels showed mixed trends yet remained generally manageable; statistics indicate that as of May 6, total inventory stood at approximately 48,000 tons, remaining unchanged from the previous week.

Domestic Demand Declined:

This week, downstream users resisted high raw material prices, leading to an overall decline in capacity utilization rates across major industries. Specifically, the capacity utilization rate for ABS stood at 57.45%—a decrease of 2.75% from the previous week; for acrylic fiber enterprises, the rate was 24.95%—down 10.88%; and for acrylamide, it was 57.21%—a marginal decline of 0.23%. Taken together, these factors indicate a decline in demand for vinyl cyanide, with consumption volumes continuing to contract.

Rising Costs:

During the week, raw material propylene prices surged significantly, driving up production costs; meanwhile, vinyl cyanide prices edged up only slightly, resulting in narrowed theoretical profit margins and an exacerbation of production losses. According to statistics, as of May 8, the market price for propylene in Shandong stood at 9,700 RMB/ton—an increase of 215 RMB/ton from the previous week's price of 9,485 RMB/ton. Concurrently, the average production cost for vinyl cyanide reached 12,325 RMB/ton (a month-on-month increase of 3.79%), while the average production profit for vinyl cyanide during the same period stood at -1,325 RMB/ton (a month-on-month decline of 370 RMB/ton).

Market Outlook

Currently, the domestic vinyl cyanide market remains in a stalemate, characterized by sideways consolidation. External market conditions remain unstable, while domestic demand continues to be weak, resulting in sluggish buying interest in the spot market. Compounding this situation, Liaoning Jinfa Technology’s 260,000-ton vinyl cyanide facility is scheduled to shut down for maintenance for 15–20 days in early June, following the shutdown of one production line at Shanghai SECCO’s 520,000-ton facility on May 7 for maintenance. Consequently, overall operating rates have dropped from a previous level of 50% to 25%. With both supply and demand contracting simultaneously, the market is expected to remain relatively stable and continue its sideways consolidation in the short term.

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