In 2024, there will be no new production capacity added to the domestic acrylonitrile market, coupled with an increase in parking and production cuts. The temporary supply tightening will drive up prices and restore profits, resulting in a wide range of fluctuations in the acrylonitrile market. At the beginning of the year, the price was 9816 yuan/ton, and at the end of the year, it was 9316 yuan/ton, a decrease of 5.05% compared to the beginning of the year; The high point of the year is 10863 yuan/ton, the low point is 8067 yuan/ton, and the amplitude is 34.66%.
Starting from February, the supply gradually decreased and the market opened up an upward channel. Although the overall downstream demand growth during this period was lower than expected, the fundamentals still showed a temporary tightening trend, which stimulated the gradual rise of acrylonitrile prices. In April, the increase was significantly expanded, and the price quickly surged to the highest point of the year. Starting from May, the industry’s capacity utilization rate gradually increased to over 80%. At the same time, downstream demand entered the traditional off-season from June to August. Under the contradiction between supply and demand, acrylonitrile prices continued to decline, and in late August, prices fell to the lowest point of the year.
Production losses combined with inventory pressure have led to some acrylonitrile factories voluntarily reducing production, while major factories in East China have reduced their equipment load, resulting in continued increase in cost pressure. In the last week of August, the domestic acrylonitrile market bottomed out and rebounded after nearly four months of decline. However, due to the lack of substantial improvement in fundamentals and the discontinuous follow-up of actual demand, the domestic acrylonitrile market entered a consolidation state after a rapid rise at the end of August.
In late October, due to the planned maintenance, fault reduction, and shutdown of some manufacturers’ facilities in East China, the overall industry production was at a low level, which stimulated the price of acrylonitrile to rise again. At the end of the year, on the one hand, the price of raw material propylene fell, while the previously shut down acrylonitrile plant was restarted again, and the supply side rebounded, causing a slight decline in acrylonitrile prices again.
Outlook for Acrylonitrile Market in 2025
Cost aspect: Peak production capacity of propylene, expected decrease in acrylonitrile cost aspect
2024-2025 will still be the peak period for the production of propylene, and the propylene production capacity with PDH as the production path will converge and be put into operation. In 2024, the new production capacity will be 6.35 million tons per year, and the domestic propylene production capacity base will be increased to 70.44 million tons per year. The trend of propylene production capacity exceeding propylene consumption is further expanding. 2025 is still the peak stage for propylene production capacity investment, and propylene production capacity with PDH as the production path will be intensively put into operation. With a significant increase in propylene supply, supply side pressure will further increase, which will have a certain negative impact on the propylene market.
The production process of all acrylonitrile plants in China is the propylene ammonia oxidation method, which usually requires 1.05 tons of propylene and 0.5 tons of synthetic ammonia to produce 1 ton of acrylonitrile. In the production process of acrylonitrile, the overall proportion of raw material cost is around 75%. For acrylonitrile factories, the main raw material propylene is mostly self produced, so its cost is closely related to the production cost of raw material propylene.
Based on a comprehensive analysis of crude oil and supply and demand, the supply and demand as well as cost pressures in the propylene market will continue to rise in 2025. It is expected that the center of gravity of propylene prices may decline compared to 2024. However, due to the continued high volatility of international crude oil expectations and the good support of propylene costs, the expected decline is relatively controllable. Taking the Shandong market as an example, it is expected to fluctuate within the range of 5000-7000 yuan/ton in 2025, with high-frequency fluctuations in the range of 5500-6500 yuan/ton. The low point of market prices is expected to occur in the first quarter, and the high point is expected to occur in the third quarter.
Supply side: Acrylonitrile production capacity continues to expand, supply side expectations continue to increase
By the end of 2024, the total production capacity of acrylonitrile in China will remain at 4.399 million tons per year, and the annual capacity utilization rate of the acrylonitrile industry will be around 78.34%.
However, according to statistics, there are multiple sets of new production capacity plans totaling 1.31 million tons per year planned to be put into operation in China by 2025. The increase in supply will bring pressure to the acrylonitrile market in 2025. At that time, the number of domestic acrylonitrile production enterprises will also increase to 21, and the industry concentration will further decrease. While overcapacity will increase, the impact of fluctuations in individual units on market trends will also weaken.
Demand side: ABS remains the main downstream demand growth point
The downstream consumption of acrylonitrile is relatively extensive, mainly concentrated in the three major fields of ABS, acrylic fiber, and acrylamide, as well as a small amount applied in industries such as nitrile latex, nitrile rubber, polymer polyols, and carbon fiber.
Among the three major downstream demand areas, there is already a risk of overcapacity in the acrylamide and acrylic fiber industries. According to information statistics, there are no plans for new production capacity in the acrylamide and acrylic fiber industries by 2025. The ABS industry remains the main demand growth point, with a fast pace of capacity expansion. In 2025, various related enterprises announced a total of approximately 4.5 million tons/year of new production capacity.
The main consumption area of ABS is in the electrical appliance manufacturing industry, accounting for more than 70% of China’s total ABS consumption in 2024, with household appliances accounting for the largest proportion, accounting for more than 45% of the total consumption. In the field of household appliances, the enterprises with the largest consumption of ABS include Gree Electric, Midea Electric, Qingdao Haier, Sichuan Changhong, Meiling Electric, Qingdao Hisense, etc.
From the analysis of the output of the home appliance market in the past 10 years, the era of rapid growth in white goods production has passed, and home appliances belong to durable goods. In recent years and in the future, with the downturn of the real estate market and the sluggish demand for end products, the boost effect of the white goods market on the emerging demand for ABS is limited. Its overall consumption growth rate is still slow, and the industry’s operating rate has gradually decreased from over 90% to 60-70% this year. Therefore, its production growth is far behind the capacity growth rate. And ABS has a relatively low unit consumption of acrylonitrile (22%~25%).
Import and export: Acrylonitrile exports may still face resistance by 2025
With the gradual emergence of overcapacity in domestic acrylonitrile production, exports have become an important component of acrylonitrile demand. Since 2021, China has transformed from a net importer of acrylonitrile to a net exporter. Although the export volume in 2023 has slightly decreased compared to 2022 due to shrinking overseas demand, and domestic acrylonitrile plants are operating at low profits with low willingness to start production, there has been a tight balance of supply in certain periods of time, resulting in some low-priced imported goods to cover the gap and an increase in import volume. But in 2024, the export volume will basically maintain around 20000 tons or more per month, far exceeding the import volume. However, given that the global economy has entered a “low growth normal”, the expected global economic growth in 2025 is still slow, and acrylonitrile exports may still face certain obstacles.
Overall, based on the current downstream demand growth, it is difficult to fully digest the concentrated release of acrylonitrile production capacity. The expected pattern of oversupply in the domestic acrylonitrile industry is difficult to improve, and it is expected that the industry’s profits will continue to be in a low period. The production cost of products will become a key competitive factor for acrylonitrile enterprises.
Market forecast: An acrylonitrile analyst from Shengyi Society believes that the cost of acrylonitrile is expected to decrease in 2025, and the demand increment is still slightly insufficient under the trend of supply and demand growth. The industry’s oversupply pattern will intensify; In addition, the global economy has entered a “low growth normal”, and acrylonitrile exports may still face certain obstacles. Overall, the industry competition is becoming increasingly fierce, the operating rate is further declining, and the price center may slightly decrease compared to 2024.
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