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Wednesday, August 10, 2022

European acrylonitrile hits six-year low on cheaper US imports

European acrylonitrile spot prices fell $32/mt to $1,168/mt CIF MED Tuesday, a low not seen since June 2009.

European ACN prices have fallen in an almost linear fashion since August 2014, where they peaked at a high of over two years at $2,060/mt CIF MED.

Producers and traders have said cheap export prices from US have been the cause.

The US ACN export price dropped $20/mt Tuesday to be assessed at $1,050/mt FOB USG.

With freight to Europe pegged at $100/mt, the arbitrage from the US is open.

Despite this, not too much ACN had been heard fixed from the US to Europe.

It was the influence of the cheaper US-origin alternative supply being brought up in negotiations that had pressured prices in Europe, sources said.

Substantially lower feedstock propylene prices in the US have pressured ACN prices in the country.

“With the propylene price difference between the US and Europe, it is impossible for us to compete,” the producer source said.

European chemical grade propylene was assessed at Eur863/mt ($961/mt) FD NWE Friday.

To compare, US CGP was at 27.25 cents/lb ($601/mt) FD USG.

With 1.1 mt of propylene and 0.5 mt of ammonia required for the production of every 1 mt of ACN, European feedstock costs alone look to surpass current spot price levels in the continent.

Major European producers have exited the spot market amid this lack of profitability.

“We cannot work with the current $300/mt [or more] propylene spread [between Europe and the US]. We would need that to be close to $100 before we restarted production,” a producer source said.

The impact of the reduction in supply from producers is yet to be seen this month, August being a traditional maintenance period among derivative producers, sources said.

“Demand in the spot market is slow, we are competing for potential end users,” a trade source said.

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