Acrylonitrile Spot Prices Soften: Lihuayi's Second Cut Signals Supply-Demand Shift

The acrylonitrile spot market showed a clear softening signal in early July. On July 7, Lihuayi Lijin Petrochemical cut its acrylonitrile spot price twice in a single day, with a cumulative reduction of 200 yuan/ton, settling at 9,200 yuan/ton ex-works. This move is not isolated but reflects the shifting supply-demand dynamics in upstream chemical raw materials.

Background

Lihuayi operates a 260,000-ton/year acrylonitrile unit running at normal capacity. As a major domestic producer, its price adjustments often serve as a bellwether. The double cut indicates that the company opted to offer discounts amid inventory pressure or weakening order expectations. According to industry data, acrylonitrile prices have been under pressure since Q2, with the current level near the lower end of the recent range.

The bearish sentiment is reflected in a -1 score for acrylonitrile, as stable supply meets cautious demand. For the textile chain, acrylonitrile is a key feedstock for acrylic fiber, ABS resins, and nitrile rubber, so its price decline will ripple downstream.

Industry Impact

For acrylic fabric producers, lower acrylonitrile costs reduce expenses for acrylic staple fiber and tops. This will ease cost pressures for knitting mills using acrylic blends. However, the pass-through effect takes time—chemical fiber plants typically hold a few weeks of inventory, so the impact may only appear in acrylic fiber prices three to four weeks later.

For ABS resin manufacturers, acrylonitrile is one of three monomers, and its price cut directly benefits modified plastics and appliance casing producers. But the recovery pace in downstream consumer electronics and automotive sectors remains uncertain, and whether demand can absorb the cost reduction is a key concern.

From a trade perspective, this cut may trigger follow-ups from other producers. Domestic acrylonitrile capacity has expanded rapidly, keeping supply ample. If demand fails to rebound, prices could test the 9,000 yuan/ton level. For coastal textile processors relying on imported acrylonitrile, a procurement window is opening.

Practical Recommendations

For Buyers - If feedstock inventory is low to medium, increase procurement to lock in current lows, hedging against potential short-term rebounds due to plant maintenance or logistics disruptions. - Monitor price movements of major producers like Sierbang and Shanghai SECCO, establish a comparison procurement mechanism to leverage supplier competition. - Negotiate price adjustment clauses with downstream acrylic yarn mills to pass on some raw material savings, boosting final product competitiveness.

For Exporters - Adjust export quotes for acrylic fabrics and blended yarns downward, reflecting lower input costs to enhance price competitiveness in Southeast Asian and South Asian markets. - Hedge against combined risks of yuan exchange rate fluctuations and raw material costs using forward contracts to protect profit margins. - Stay alert to anti-dumping investigations on acrylic products in Western markets, and proactively develop customer bases in non-sensitive regions.