Formosa Petrochemical Profits In Current Economy
July 20, 2010
The production of acrylonitrile (AN) in the main Japanese and Korean plants have temporary shutdown for annual maintenance. In the absence of competition, two Taiwanese AN manufacturers, Formosa and Sinopec have seize upon this opportunity and reacted to the increase in AN demand by quoting USD 2,450 per ton of AN starting in early June.
During this period in June, Formosa and Sinopec generated a substantial portion of their profits from the sale of AN material. In the current market, raw acrylonitrile is about USD 1,180 per ton.
However, since mid-June, the Japanese and Korean manufacturers have resumed their production. As a result, the price of raw AN has fallen from USD 2,250 per ton to USD 2,180 per ton. Calculating from the past three weeks, there has been more than a 10% decrease in price.
The two main consumers of AN include ABS related industry and acrylic fiber plants, and these two consumers have been facing an off-season since late June. Both industries have cut down the usage of AN. Moreover, given that the Japanese and Korean manufacturers have returned into the market, the price of raw AN appear to have stabilized.