Million tons of capacity expansion, acrylonitrile industry how to solve the problem of supply and demand imbalance?

the acrylonitrile industry is experiencing an unprecedented cycle of capacity expansion in 2025. With Jilin Petrochemical's 260000-ton plant successfully started in mid-August, the industry once again ushered in a period of concentrated production capacity. According to the latest statistics from Jinlianchuang, the new production capacity is expected to reach 1.31 million tons this year. If all projects are put into operation as scheduled, the total acrylonitrile production capacity in the country will exceed the 5.7 million tons mark, an increase of nearly 25% over the end of 2024.

In terms of timing, this is another burst of capacity following the first expansion cycle in 2020-2023. In the first cycle, the total capacity of the industry jumped from 2.597 million tons to 4.399 million tons, and the scale and speed of the current round of expansion is even more alarming. In the first half of this year, Yulong Petrochemical's 130000-ton, Quanzhou Petrochemical's 260000-ton and Zhenhai Refinery's 400000-ton units have been put into operation one after another. With Jilin Petrochemical's new production capacity, the new production capacity exceeded 1 million tons in only half a year.

The direct impact of capacity expansion is the restructuring of the market competition landscape. With the new entrants such as Zhejiang Petrochemical and Yinglex (Tianjin), the number of acrylonitrile production enterprises will increase from 16 to 20. This change will significantly change industry concentration: the capacity concentration of the top five companies is expected to fall from 63.47 per cent in 2024 to 55.91 per cent, the lowest level in nearly five years.

From the perspective of industrial economics, the decline of concentration often means the dispersion of price discourse and the intensification of market competition. For traders, more supplier choices may lead to greater bargaining space, but at the same time they face more complex supply chain management and quality control challenges.

ABS resin: weak core driver

as the largest downstream consumption area of acrylonitrile, ABS resin accounts for 50% of its consumption structure, but this area is facing a severe imbalance between supply and demand. According to the data, ABS production capacity grew at a compound annual growth rate of 19.97 per cent between 2020 and 2024, with total production capacity surging from 4.425 million tonnes to 9.165 million tonnes. However, high production capacity did not translate into industry benefits, with average ABS industry profits falling to -253 yuan/tonne in 2024, down 220.3 per cent year-on-year, and full-year production falling back to 5.488 million tonnes.

What is more noteworthy is that the ABS industry will still have 3.8 million tons of new equipment put into production in 2025-2026, but the demand side growth is weak. ABS terminal demand is dominated by household appliances (accounting for more than 45%). Affected by the adjustment of the real estate market and weak consumer demand, the white power market has limited boost to the new demand for ABS. The industry is expected to operate in a "high capacity, low yield" state for a long time.

Acrylic and Acrylamide: Limited Demand Support

the acrylic field is also under pressure. The downstream weaving sector of the chemical fiber industry performed poorly, with the operating rate of weaving enterprises falling below 60% since 2025 and overseas orders falling 30% year-on-year. Chemical fiber enterprises have to control production capacity and balance supply through centralized maintenance, which has a very limited support for the formation of acrylonitrile demand.

In terms of acrylamide, although there are favorable policies in emerging areas such as environmental protection and water treatment, the scale of demand has not yet been formed, and it is temporarily unable to fill the demand gap in traditional application areas. Against the backdrop of a weak global economy, downstream purchasing enthusiasm continues to be sluggish.

At present, the downstream operating rate of ABS, acrylic fiber and acrylamide is generally maintained at a low level of 60%-70%, and the pulling effect on acrylonitrile is obviously insufficient.

Carbon fiber industry chain: the key track of value reconstruction

despite the pressure on traditional downstream demand, high-end applications are injecting new growth momentum into the acrylonitrile industry. In the carbon fiber industry chain, the cost of raw silk accounts for a very high proportion-in 2024, the cost of raw silk accounts for 58.71 percent of the total cost of carbon fiber, and the value of acrylonitrile as a key raw material for carbon fiber raw silk is becoming increasingly prominent.

China's carbon fiber industry has shown strong development resilience, with production increasing from 18700 tons in 2020 to 59000 tons in 2024, with an average annual compound growth rate of 33.28. With the breakthrough of key preparation technologies such as dry-jet wet spinning and the continuous optimization of production costs, the penetration rate of carbon fiber in the fields of lightweight components of new energy vehicles and large-scale components of wind blades will be significantly improved.

The industry predicts that with the key support of relevant policies for the new material industry, high-end downstream applications such as carbon fiber and high-performance engineering plastics will achieve rapid growth. It is expected that the demand for acrylonitrile will increase by 8%-12% annually from 2025 to 2030.

Technological innovation: the core element of winning competition

at present, the acrylonitrile industry has entered a stage of intense competition, and production cost control has become the key to the survival of enterprises. From the perspective of industry development trend, technological innovation will become the core driving force of future market competition. Enterprises with independent technology can not only reduce production costs in terms of raw material consumption and energy consumption control, but also produce products that meet high-end downstream demand, thus occupying an advantageous position in the industry reshuffle.

in the next five years, as the demand for carbon fiber in emerging fields enters an explosive period, the acrylonitrile market will simultaneously enter the golden development stage, and the annual output value of the industry is expected to exceed 100 billion yuan, becoming an important cornerstone to support the development of my country's high-end chemical new materials industry.

For chemical traders and supply chain practitioners, it is recommended to focus on the following areas:

supply Chain Layout: In the period of concentrated production capacity, it is recommended to establish long-term cooperative relations with manufacturers with technical advantages and cost control capabilities to avoid supply risks.

Market Segmentation: Focus on changes in demand in high-end applications such as carbon fiber and high-performance engineering plastics, and lay out trade channels for related products in advance.

Inventory Management: In a market environment where supply and demand are unbalanced, a more flexible inventory strategy should be adopted to avoid the financial pressure caused by excessive hoarding.

In the market environment of supply and demand imbalance in acrylonitrile industry, only the enterprises that take the lead in realizing the transformation of "stronger and better" can seize the development opportunities of high-end downstream and occupy the first opportunity in the fierce market competition.