China's acrylonitrile market to enter oversupply phase
China's acrylonitrile (AN) production is expected to enter an oversupply phase in the second half of 2021. New facilities with a total capacity of 910,000 tons to 1.04 million tons are scheduled to start up in the second half of the year. On the other hand, the expansion of derivative facilities is limited to ABS resin and NBR.
With the start-up of new facilities such as Shandong Haijiang, Sailboat Petrochemical and Zhejiang Petrochemical by 2020, the actual production capacity of AN in China is 2.509 million tons. While AN production capacity is expanding, the expansion of derivative facilities is limited to ABS resin and NBR. In addition, the profitability of AN manufacturers has been strong as the derivative markets were strong. As a result, many AN facilities are scheduled to be constructed within the next five years, and AN supply in the second half of 2021 was expected to significantly exceed demand. Under this situation, many market players believed that the prices of AN in China would become weaker in the future, and the profitability of AN plants would deteriorate.