Asia ACN to rise in April on new demand

The price gap between ACN producers and the downstream AF makers has widened to more than $50/tonne (€33/tonne).

Despite the wide gap, traders said that a price increase for April contracts was highly achievable due to tight supply and rising demand from downstream ABS and AM producers in the second quarter.

 “Demand from the other derivative ABS and AM producers is growing and they can also pay a higher price than the AF makers, so even if demand from the AF makers was to remain flat, the impact on the price hike will be limited,” a Japanese trader said.

Major Japanese ACN producer, Asahi Kasei Chemicals, has proposed $2,020/tonne CFR (cost and freight) Asia for its April contract nomination, up $20/tonne from its March contract nomination.

US producer, INEOS Nitriles, is also expected to announce a modest increase for April.  INEOS settled its March contracts at $1,955/tonne, up $15/tonne from February.

However, buying indications of AF producers, traditionally the major consumers of ACN, were below the $1,900/tonne level.

Taiwanese AF producer, Tong Hwa Fibre, has threatened to slash the operating rate of its 55,000 tonne/year plant by a further 20% to 50% in April, if ACN prices were to continue to rise.

Tong Hwa Fibre has been operating at a reduced rate of 70% in March.