ACN supply recovery in Europe stutters in April as buyers note setbacks in availability, suggesting the market will most likely take longer to return to balance, a situation that will probably continue to fuel the shortages of SAN and ABS.
Acrylonitrile (ACN) supply shortages began in December when INEOS Nitriles declared force majeure (FM) and the shortages continued in Q1, impacting production of downstream polymers. Trinseo was forced to declare FM on SAN because of lack of ACN while other producers had to heavily reduce production.
However, ACN supply started to improve in late March, raising expectations of a return to normality in April, but lately buyers noted a deterioration, dashing hopes of significant better supplies. While the worst seems to be over, the increase in supply is taking longer and the market could remain tight in April and possibly May.
One SAN and ABS producer said they are still on allocations and receiving 50-60% of requirements which suggests a setback from the expectations for April. Therefore, production of SAN and ABS could be affected in April and May by the ongoing shortages of ACN, even if buyers have adapted from the initial shock by sourcing ACN in the spot market.
However, if the shortages continue in May, SAN and ABS could remain tight during a period of falling prices, since there are expectations of lower styrene prices in May, a situation that will allow sellers to maintain the current high margins achieved since 2H 2020.