Aug Acrylonitrile Market Report

I. MarketRev

1. Crude oil

In Aug, crude oil continued the rising trend of last month, reaching a high level of $82.55/barrel on Aug 4. After that, it fluctuated and then kept slipping till Aug 25, touching $71.63/barrel. In end‐Aug the prices fluctuated around $71‐75/barrel.

2. Propylene

Propylene presented strong in Aug. The price rose from $1,100/mt in the beginning of this month to 1,193/mt on Aug 12. The next week it slipped a little but climbed again in late Aug to $1,195/mt and firmed at that level. In Aug many oversea propylene units underwent maintenance work. Besides, the fire on Formosa’s 1.1 mln ton/yr propylene unit in end‐July caused propylene supplies to be tightened, which contributed to the rising of propylene price.

3. ACN market

 Asian market
Asian ACN spot market was stable in Aug. The spot assessment stabilized at $2,070/mt CFR FE. Talked level was lower at $2,000/mt or above. Supplies were a little tight due to the turnarounds of some producers. Besides, the stable China market provided some support to the whole Asia market.

European market
Europe market was sluggish due to traditional dull season, with spot price down by $300/mt in the first week. Mainstream done level was around $1,850/mt. In H2 Aug, prices firmed a little but the market did not improve much as a whole.

US market
In early Aug, US ACN fell sharply affected by slumping Europe market. Later, as US export interests turned to Asia, the market improved a little. Moreover, the market rebounded in end‐Aug on news that 10‐15% of global production was expected to be offline in October.

China market
In early Aug, ACN spot supplies in China were tight due to shipment delays and low inventories of northern plants. Prices at the port rose slightly to 17,900yuan/mt. In mid‐Aug, the tightness of supply eased as Jilin PC started CAN unit IV and ship cargoes of Shanghai Secco arrived at the port. However, the availabilities at the port became abundant around Aug 20 as several shipments arrived. Besides, more cargoes were transported to Shandong. As a result, trading sentiment weakened at the port, with done level falling to 17,700yuan/mt.

ABS makers kept running rates high during Aug. AM producers restarted in early Aug and ramped up operating rates to around 80%. Although downstream mostly purchased on need‐ o basis, transactions have improved evidently from Jul.

II. ACN imports & exports

According to custom statistics, ACN imports totaled 29kt in Jul, down 31.72% m‐o‐m and 47.47% y‐o‐y. ACN imports decreased sharply due to the lower ACN prices in China than oversea market as well as dull demands in the downstream. Traders mostly operated cautiously.

ACN imports of China in July 2010

III. Industry News

1. Asahi Kasei plans to shift its 100kt/yr ACN unit in Mizushima to produce methacrylic in mid‐Oct. Meanwhile, it will shut a 150kt/yr ACN unit in Kawasaki in Oct for 30‐40 day turnaround. The estimated production loss is 12‐16.5kt.

2. PetroChina subsidiary Daqing Petrochemical restarted an 80kt/yr ACN unit on Aug 9 and restarted the affiliated 65kt/yr acrylic on Aug 10. It began turnaround on this ACN unit on Jul 8.

3. Taiwan CPDC planed to start maintenance work on its 180kt/yr ACN unit in Kaosiung
during Aug 8‐13. Besides, it will shut down one 95kt/yr line in Nov for one month for expansion works. Its first line will be expanded to 120kt/yr by the end of 2010. Expansion on the second 95kt/yr line will be carried out at the end of next
year in 2011.

4. Jilin PC restarted its ACN unit IV on Aug 11. Since then its ACN unit II&III are running at full capacity. The operating rate of ACN unit IV was increased gradually.

5. Ineos planned to restart its 450kt/yr ACN unit in Green Lake (Ohio, US) in late Aug. This is the largest ACN unit of Ineos and was closed down in mid‐Aug due to a minor system bug.

Its 190kt/yr ACN unit in Lima, Ohio will be shut in Oct for one‐month turnaround. The estimated production loss is 16kt.

Besides, the company scheduled to start 3‐4 weeks maintenance work on its 320kt/yr CAN unit in Cologne, Germany in Sept. The production loss is estimated to be 18‐24kt.

Its ACN plant in Seal Sands, UK will be offline from Sept 23 for a 3‐week turnaround.

IV. Market Outlook

China ACN market is likely to keep stable with minor fluctuations. Currently, ACN market is largely balanced as ABS and AM plants are running at relatively high capacity. In mid‐late Sep, many deep‐sea cargoes are expected to arrive in China. However, spot supplies may become tight in USD ACN market as a lot of oversea ACN producers will have turnarounds in Sep‐Oct. Thus traders may not be eager to sell. In conclusion, China ACN market is mostly likely to be stable in Sep.