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Insight | Time:Apr 8 2018 11:01AM
China decides to add additional 25pc tariff on U.S. ACN
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On April 4 2018, U.S. government unveiled a list of Chinese imports, to levy 25pc tariffs on 1,333 goods imported from China valued $50 billion. Approved by the State Council of China, Customs Tariff Commission of the State Council decided to levy additional tariffs of 25pc on 106 U.S. products, including acrylonitrile (HS code: 29261000).

Though the implementation date has not been published yet, after the news was released, it has triggered the market concerns immediately, which may be a support for the current ACN market.

Origins Import volumes (KT) Average unit price ($/mt) Shares in 2017 Shares in 2016
U.S. 60.23 1343.04 22.24% 28.08%

Despite of slightly decrease of ACN imports from U.S. in 2017, the proportion was still above 20% in total imports. The additional 25% tariff on ACN originating from U.S. will increase the import costs obviously. Although the imports of U.S.-origin ACN are mainly the contract cargos in 2018, and transactions of spot cargos are scarce, the additional tariff will influence the purchasing mindset of buyers.

In addition, domestic ACN plants have turnaround plans continuously. PetroChina Jilin plans to shut its 452kta ACN unit from May 8 for about 40 days of turnarounds. Sinopec Anqing plans to shut down its 210kta ACN unit on Apr 8, for 42 days of turnaround. KoRuhr’s 130kta ACN unit plans to start maintenance from April 20. Domestic ACN supply is expected to decrease apparently, and with the turnarounds of ACN plants in South Korea and Japan, the domestic and imports of ACN may both see tightness.

From early April, sellers have tried to offer highly about ACN prices. Trading sentiment improves slightly, but downstream markets are not active to purchase feedstock and heavy looking-on mood is covered on the market. After the release of news about 25% tariff on U.S. ACN, traders may grasp the opportunity to raise the prices.
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