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Acrylonitrile is a large-volume commodity chemical, produced by the ammoxidation of propylene. Major acrylonitrile uses are as a vinyl monomer for such products as polyacrylonitrile for acrylic fibers, in ABS and SAN resin manufacture and as a chemical intermediate in the manufacture of adiponitrile, acrylamide and a variety of other chemicals.
During 2003–2007, the acrylonitrile market underwent a consolidation process, under which old or nonprofitable facilites in Europe and North America were shut down. This was a consequence of the start-up of two large production units in 2001 (Solutia in the United States and Formosa Plastics in Taiwan), which caused some oversupply in the market. Another significant capacity addition was the 260 thousand metric ton facility of Shanghai Secco Petrochemical that started up in China in 2005. However, this new capacity was offset by the closure in 2005 of Sterling’s 330 thousand metric ton production plant in the United States. In general, since 2003, plant closures have exceeded capacity additions. As a result of this consolidation process, the acrylonitrile supply is now tight to balanced. In general, a shift of capacity from North America to Asian countries has been observed during recent years.
The following pie chart shows world consumption of acrylonitrile:
Sluggish downstream demand and rising feedstock costs have brought about stagnation in production activity. Both these trends have significantly lowered profitability in the acrylonitrile market recently. During the last few years the price of acrylonitrile has increased dramatically, following the rising propylene and ammonia costs. However, the price of acrylic fibers, the major downstream product, has failed to increase because of the supply surplus. Since late 2007, margins have been so low that acrylic fiber producers were forced to reduce operating rates not only in Europe, but also in Asia. This slump in acrylic fiber production induced many acrylonitrile producers to reduce output at their plants during 2008. This year acrylic fiber output was low even in China, which is one of the major producers. In Western Europe acrylic fiber output has been decreasing at a rate of 6–7% for several years.
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