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Asian acrylonitrile prices and market news
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Asian acrylonitrile prices soar as Ineos force majeure tightens supply; Asian acrylonitrile prices surged week on week after Friday's declaration by Ineos Nitriles of force majeure on ACN supplies at its Green Lake plant in Texas, industry sources said.

Market participants said most of Asia would be hit, but that China would be spared due to a well supplied domestic market. CFR South Asia and CFR Southeast Asian prices rose $50 on the week to $1,225/mt and $1,210/mt respectively while the CFR Far East Asia marker lagged behind only rising $5 over the same period to $1,160/mt Tuesday.

A China-based source said the relatively new plants of Secco and Sailboat, which produce a combined 520,000 mt a year of ACN, were enough to cover demand.

A second China-based end user said he would only purchase more supply domestically. The domestic price was heard at about Yuan 8,800/mt Tuesday down from Yuan 9,000/mt heard last week. That is equivalent to $1,090/mt CFR China on an import-parity basis, well below international spot prices.

However, those needing cargoes from the international spot market could expect to pay higher prices, industry sources said.

Several suppliers said that there were no firm offers in the market right now and selling indications have definitely adjusted higher, with most saying $1,250-$1,300/mt CFR Far East Asia notionally. That is $50 higher than the $1,200/mt at least a couple of weeks back.

"I did not make an official offer...but for sure it is upwards but how much we are not sure, $50 up, $100 up, I don't know yet. August, September should be tight but the real impact will be in the fourth quarter," a third source based in Northeast Asia said.

The news has come at a time when the Asian market was already very tight, with July and August already well supported because of a heavy turnaround season even before Ineos caught market participants off guard. "The major impact is that there would be less term and spot cargo from the US to Asia, and some downstream producers need to find some spots from the market in the next few months," the first China-based market source also said.

The third NE Asian source also said the force majeure translated into a shortfall of around 40,000 mt a month. He expected the operating rate at the plant to be very low, even 10%.

The issue started due to a shutdown of a nearby chemical-grade propylene pipeline, owned by ExxonMobil Chemical, which was the primary source of feedstock for the plant.

Meanwhile, sources said that the downstream acrylic fiber market has remained sluggish. The first source said that acrylic fiber production rates in China have dropped recently, falling by about an average of 80%-60% in general.

Several sources said that the downstream acrylonitrile-butadiene-styrene market however could be a key supportive factor for now as the market was more bullish than acrylic fiber.

Ineos takes Sinopec to court alleging acrylonitrile technology infringement; Ineos said Friday it was taking legal action against China's Sinopec Ningbo Engineering and subsidiaries SNEC and Anqing for alleged infringement of copyright and trade secrets.

It said in a statement the Ningbo Engineering Company had breached a technology agreement, which taken together with trade secret misuse by other Sinopec companies led to the development of Sinopec acrylonitrile plants without agreement or consent by Ineos.

Ineos is pursing legal action in courts in Beijing and arbitration in Sweden.

The company said it feared that the alleged infringements could damage its acrylonitrile business and acn pricing which is valued at $3 billion, generates profits of up to $500 million/year and employs around 5,000 direct and indirect jobs in the USA and Europe.

"We have good and valuable relationships with Sinopec and other Chinese companies across our business. But in this case, we have to take action to protect the interests of our stakeholders," Ineos chairman Jim Ratcliffe said.

"The fundamental value of a business like Ineos depends on its intellectual property which includes trade secrets and patents, covering technology, design and operations. Unless we protect our intellectual property, ultimately we will see the demise of Ineos," he added.

Ineos has had a longstanding relationship with SNEC for the licensing and use of acrylonitrile technology in China since 1984, according to the company.

Acrylonitrile is used in the production of plastic copolymers such as ABS and carbon fiber used in the manufacturing processes of many consumer products such as toys, power tools and is used in industries such as aerospace and automotive.

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