SunSirs: Rising Propylene Costs Drove Up Vinyl Cyanide Production Costs

During the week, vinyl cyanide prices remained at elevated levels; concurrently, rising propylene prices drove up production costs, resulting in a narrowing of theoretical profit margins for vinyl cyanide. According to statistics, for the week of April 3–9, the average domestic production cost for vinyl cyanide stood at 11,967 RMB/ton—a month-on-month increase of 6.35%. During the same period, the average production profit for vinyl cyanide was +183 RMB/ton, representing a month-on-month decline of 395 RMB/ton.

Analysis and Commentary

Vinyl cyanide

Vinyl cyanide prices remain at elevated levels; however, a rise in the cost of propylene feedstock has driven production costs up by 6.35%, resulting in a profit margin contraction of 395 RMB/ton. This indicates that cost-side support may push up spot prices for vinyl cyanide, yet the decline in profitability reflects pressure from the demand side. Overall, the market outlook is neutral-to-bullish. In the short term, spot prices may find support from rising costs, though narrowing profit margins could dampen production incentives.

Propylene

The rise in propylene prices directly boosts spot demand for the commodity and could drive up short-term prices. When combined with the latest futures data—such as the closing price of 7,545 RMB/ton for the ZCE 2701 contract (which, despite a daily change of -257 RMB/ton indicating volatility, sees its overall trend underpinned by rising spot prices)—futures prices are likely to stabilize and rebound, as the cost pass-through effect lends support to market sentiment.

As an integrated internet platform providing benchmark prices, on April 9, the benchmark price for vinyl cyanide, as reported by SunSirs, stood at 11,766.67 RMB/ton—an increase of 2.02% compared to the beginning of the month (11,533.33 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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