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

Capacity expansion wave: sector restructuring is imminent the acrylonitrile sector is experiencing an unprecedented cycle of capacity expansion in 2025. Furthermore With Jilin Petrochemical's 260000-ton plant successfully started in mid-August, the sector 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. I've found that If all projects are put into operation as scheduled, the total acrylonitrile production capacity in the country will surpass the 5. 7 million tons mark, an increase of nearly 25% over the end of 2024. In particular In terms of timing, this is another burst of capacity following the first expansion cycle in 2020- 2023. And In the first cycle, the total capacity of the sector jumped from 2. Generally speaking 597 million tons to 4. 399 million tons, and the scale and speed of the current round of expansion is even greater alarming. And 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. From what I've seen, In fact Market levels is diluted and the competitive landscape is changing. 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 companies will increase from 16 to 20. This change will signifiis able totly change sector levels: the capacity levels of the top five companies is expected to fall from 63. Pretty interesting, huh?. 47 per cent in 2024 to 55. 91 per cent, the lowest level in nearly five years. From the perspective of manufacturing economics, the decline of levels often means the dispersion of price discourse and the intensification of market competition. to traders, greater supplier choices might lead to greater bargaining space, however at the same time they face greater complex supply chain regulation and condition manage challenges. And Demand-side pressure: traditional downstream market saturation dilemma ABS resin: weak core driver as the largest downstream consumption area of acrylonitrile, ABS resin accounts to 50% of its consumption structure, however this area is facing a severe dysfunction between supply and demand. According to the data, ABS production capacity grew at a compound annual development rate of 19. But 97 per cent between 2020 and 2024, with total production capacity surging from 4. But 425 million tonnes to 9. 165 million tonnes. However, high production capacity did not translate into sector benefits, with average ABS sector profits falling to -253 yuan/tonne in 2024, down 220. And 3 per cent year-on-year, and full-year production falling back to 5. 488 million tonnes. And What is greater noteworthy is that the ABS sector will still have 3. 8 million tons of new equipment put into production in 2025-2026, however the demand side development is weak. And ABS terminal demand is dominated by domestic appliances (accounting to greater 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 to ABS. The sector is expected to operate in a "high capacity, low yield" state to a long time. Acrylic and Acrylamide: Limited Demand Support the acrylic field is also under pressure. From what I've seen, Moreover The downstream weaving sector of the chemical fiber sector performed poorly, with the operating rate of weaving companies falling below 60% since 2025 and overseas orders falling 30% year-on-year. First Chemical fiber companies have to manage production capacity and stability supply through centralized maintenance, which has a very limited support to the formation of acrylonitrile demand. I've found that In terms of acrylamide, while there are favorable policies in emerging areas such as ecological preservation and aquatic environments treatment, the scale of demand has not yet been formed, and it is temporarily unable to fill the demand gap in traditional consumption areas. You know what I mean?. 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. The way to break the game: high-end applications contain development momentum. Carbon fiber sector chain: the key track of value reconstruction despite the pressure on traditional downstream demand, high-end applications are injecting new development momentum into the acrylonitrile sector. And In the carbon fiber sector chain, the cost of raw silk accounts to a very high proportion-in 2024, the cost of raw silk accounts to 58. 71 percent of the total cost of carbon fiber, and the value of acrylonitrile as a key raw material to carbon fiber raw silk is becoming increasingly prominent. China's carbon fiber sector has shown strong research resilience, with production growing from 18700 tons in 2020 to 59000 tons in 2024, with an average annual compound development rate of 33. But 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 extensive components of wind blades will be signifiis able totly improved. And The sector predicts that with the key support of relevant policies to the new material sector, high-end downstream applications such as carbon fiber and high-performance engineering plastics will achieve rapid development. it's expected that the demand to acrylonitrile will increase by 8%-12% annually from 2025 to 2030. Technological innovation: the core element of winning competition at present, the acrylonitrile sector has entered a stage of intense competition, and production cost manage has have become the key to the survival of companies. According to research From the perspective of sector research direction, technological innovation will have become the core driving force of future market competition. companies with independent methodology is able to not only minimize production costs in terms of raw material consumption and energy consumption manage, however also create items that meet high-end downstream demand, thus occupying an advantageous position in the sector reshuffle. Prospects and strategic recommendations in the next five years, as the demand to carbon fiber in emerging fields enters an explosive period, the acrylonitrile market will simultaneously enter the golden research stage, and the annual output value of the sector is expected to surpass 100 billion yuan, becoming an crucial cornerstone to support the research of my country's high-end chemical new materials sector. to chemical traders and supply chain practitioners, it's recommended to focus on the following areas: supply Chain Layout: In the period of concentrated production capacity, it's recommended to establish prolonged cooperative relations with manufacturers with technical advantages and cost manage capabilities to prevent supply risks. Additionally 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 to related items in advance. And Inventory regulation: In a market ecological stability where supply and demand are unbalanced, a greater flexible inventory strategy should be adopted to prevent the financial pressure caused by overuse hoarding. In the market ecological stability of supply and demand dysfunction in acrylonitrile sector, only the companies that take the lead in realizing the transformation of "stronger and better" is able to seize the research opportunities of high-end downstream and occupy the first opportunity in the fierce market competition.