Experts:

• Kevin Longworth, Director, Global Acrylonitrile

The global petrochemical markets are undergoing an intense period of volatility, with energy prices fluctuating, inflation rising, and shifting geopolitics altering the landscape in unprecedented ways. Acrylonitrile markets are also confronting numerous pressures, with production costs escalating rapidly. The margin position of global producers has deteriorated significantly due to extenuating factors beyond their control, while improved demand offers no immediate relief from these inflationary pressures. In a landscape increasingly driving the industry toward rationalization, producers face the prospect of even more supply coming online in Asia by the end of this year.

Downstream consumers of acrylonitrile are pushing back against higher prices, and domestic demand in the fourth quarter of this year is expected to weaken across a multitude of derivative sectors serviced by acrylonitrile. Although the global chemical industry has experienced numerous shocks over recent years, this current wave of changes is forcing businesses to rethink their strategies for 2027 and beyond. In Europe, average raw material costs are expected to rise by €400 this year to reach €1,800 per metric ton.

In Asia, raw material feedstock costs have risen by $500 year-to-date. The United States has been somewhat of an exception, with cost increases remaining more moderate and an overall increase of approximately $200 expected by year-end. While this substantial cost disparity would typically suggest arbitrage opportunities between regions, muted demand, supply chain risks, and volatile pricing have prompted traders and producers to mitigate risk by keeping cross-regional trade to a minimum. With prices experiencing extreme volatility, the old adage that “what goes up must come down” applies, leaving the market to anticipate whether, when, and to what extent prices will decline. The ongoing uncertainty regarding the timing and potential realization of a peace agreement in the Middle East leaves market direction unclear, creating hesitation among buyers and complicating purchasing decisions.

Economics represent only one side of the equation; supply and demand dynamics form the other. Here, we observe marked divergence among regions: Europe faces declining demand due to lower-cost derivative imports, while the U.S. has experienced downstream derivative closures over the past year that reduced total demand, though demand is expected to remain relatively flat for 2027. A notable bright spot in the United States is the acrylamide sector, which continues to operate at higher average capacity utilization, buoyed by strong demand from the booming oil and gas industry.

In Asia, domestic demand in China has been recovering slowly, but the pace of demand growth has been vastly outstripped by capacity additions over the last five years. By the end of this year, global capacity for acrylonitrile is projected to surpass 10 million metric tons, whereas global demand is expected to reach only 6.6 million metric tons. Consequently, global operating rates for acrylonitrile producers will average 65% or lower by year-end—well below the threshold required for healthy profit margins.

Given this environment of high volatility and uncertainty, proactive communication and strategic networking are essential for industry players seeking new opportunities. Attending this year’s Global Acrylonitrile and C4’s Conference on the 12th of November in Seoul, South Korea, should be a priority for every company operating in this space. Participating in these discussions is vital for developing viable strategies for 2027 and beyond across challenging acrylonitrile and its derivative markets.

Join us at the complimentary Acrylontrile & C4 Forum in Seoul on 12 November. Complimentary seats.