Following the National Day holiday, strong cost-side momentum pushed acrylonitrile (AN) market prices upward with oscillating trends. Spot prices in East China remained firm above RMB 11,000/ton, while Shandong market prices rebounded from the post-holiday decline to approximately RMB 10,800/ton. Post-holiday, major feedstock prices—propylene and synthetic ammonia—surged significantly. Current theoretical estimates indicate that raw material costs alone for AN production have exceeded RMB 12,000/ton. Consequently, although AN prices have followed the upward trend, the increase has lagged behind feedstock price hikes, leading to a progressively worsening loss situation for single-product AN producers.
As shown in the charts above, current AN prices are at their highest levels in three years and clearly exceed historical averages for this period. However, production margins are simultaneously at their lowest points in three years. This recent surge in AN prices is entirely driven by robust cost-side pressures, while industry supply-demand dynamics remain persistently weak. This weakness has partially constrained the magnitude of AN price increases, hindering the downstream transmission of costs within the industrial chain and exacerbating losses for standalone AN producers.
Entering October, Sinopec Tianjin New Materials officially introduced qualified products from its new 130,000-ton-per-year AN unit into the market. Other AN plants maintained stable operations, keeping the industry utilization rate around 74%. According to Chempricehub estimates, domestic AN production in October is expected to reach approximately 390,000 tons, an increase of nearly 20,000 tons compared to September. However, neither domestic demand nor export orders showed significant growth in October. As a result, the industry's supply-demand gap widened, intensifying the existing supply-demand contradictions.
Currently, propylene resources remain tight, and short-term propylene prices are expected to maintain a bullish, volatile trend, meaning cost pressures on AN are unlikely to ease significantly. Simultaneously, there is limited room for improvement on the demand side. Therefore, changes in the supply side will be the primary factor in alleviating future market supply-demand imbalances. Under sustained loss conditions, localized passive production cuts may occur. Such adjustments would help alleviate both the shortage of propylene resources and the oversupply pressure on AN products.
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