Since Acetonitrile is a commodity product, its prices are derived by supply-demand dynamics. So, for prices to go up either demand goes up or supply goes down. In case of Acetonitrile, it was the later.
Acetonitrile can be manufactured by 2 process:
2) By the reaction of Acetic Acid & Ammonia- Acetonitrile manufactured by this method is used in Pharma industry as the byproduct in the other process consists of impurities.
Acrylonitrile finds usage in Auto industry but to the slowdown in the industry since 2018 and coz of some other disruption, some of the acrylonitrile capacity has been shut down, which reduced the production of acetonitrile. Due to the closure of acrylonitrile plants, acetonitrile production has gone down and hence the sudden increase in price which continues at an elevated level for more than a year now.
THE PRICE OF ACETONITRILE HAS GONE UP BY 3X ABOUT MORE THAN A YEAR BACK AND IS STILL STANDING AT 2.5X. I THINK THIS IS THE PRIMARY FACTOR DERIVING THE OUTPERFORMANCE OF ALKYL AMINES CHEMICALS LTD.
Both the company’s management have indicated that the high price of acetonitrile is likely to continue. But it is anyone’s guess. Just the way price jumped suddenly in a few days, it can go down the same way. I am sure all player in the industry be willing to take advantage of the high price and expanding or setting up capacity of acetonitrile. Balaji Amines has already come up with a capacity of 9000TPA(Tonnes Per annum), will be taking the capacity to 18000T in FY21 and Alkyl Amine is going to add another 15,000TPA. With expanding supply, the demand-supply gap is likely to narrow down.
BUT WE DO NOT KNOW WHEN THAT IS GOING TO HAPPEN.
SO I LEARNED THAT KEEP DANCING TILL THE TIME MUSIC PLAYS BUT NEVER GET DRUNK (Source:Vijay Kedia tweet). Keep an eye out on the price, you can get the price on an Android app called “indianpetrochem”. I missed the bus with similar thoughts around Deepak Nitrite.