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[Industry Focus]：Caprolactam market in June: high costs are hard to stop the downward trend

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With the arrival of June, caprolactam the market has experienced two consecutive weeks of falling prices, showing a clear downward trend. Behind this phenomenon, the strong upward price of pure benzene, the main raw material, and the intensification of the contradiction between supply and demand work together in the market, making the price of caprolactam under pressure downward.

1. market price trend analysis

2 consecutive weeks of decline, the decline widened

in June, the market price of caprolactam experienced two consecutive weeks of decline, and the decline gradually expanded. Specific data show that as of June 14, the reference range of East China in stock market price is 13050-13150 yuan/ton, and the reference value of daily average price is 13100 yuan/ton, which is 525 yuan/ton lower than the price on May 31, or 3.85 percent. This trend suggests that the continued increase in supply combined with the slowdown in downstream demand is driving prices down.

己内酰胺价格走势图.jpg

2. Cost Support and Contradiction between Supply and Demand

caprolactam high cost, but hard to support price

the price of pure benzene, the main raw material of caprolactam, showed a strong upward trend in the first half of 2024 and reached a high level in June. Sinopec chemical sales of pure benzene listed price upward and in stock prices high, both show the strong momentum of the pure benzene market. This trend provides strong support for the production cost of caprolactam. However, despite the strengthening of cost support, the price of caprolactam has not risen in tandem, but has been affected by supply and demand. Contradictory effects fall. This is mainly due to the slowdown in downstream demand and excess supply, making the market supply and demand imbalance, prices are difficult to support.

The contradiction between supply and demand intensifies, and the negative factors dominate.

From the supply side, the level of operation in the caprolactam industry rose to a high of 91%, and the restoration of some maintenance devices in the early stage made the supply of goods in the field sufficient. However, from the demand side, the operating level of the downstream PA6 industry dropped slightly to 85%, and the early orders were gradually delivered, the downstream terminal market entered the off-season, and the follow-up of new orders was not smooth. This situation of strong supply and weak demand makes PA6 factories cautious about the purchase of caprolactam, resulting in some caprolactam manufacturers facing the problem of shipping pressure and inventory backlog. Under the pressure of loss, manufacturers have to choose low-cost shipments to ease inventory pressure.

3. after the market stalemate runs, ups and downs dilemma

considering the current market situation and the contradiction between supply and demand, it is expected that the market price of caprolactam will be deadlocked in the short term, and it will be difficult to rise and fall. On the one hand, the improvement of the contradiction between supply and demand takes time, the landing of the pre-planned maintenance and the promotion of the new production plan of the downstream PA6 are expected to improve the contradiction between supply and demand in stages. However, due to the slowdown in the follow-up of terminal market demand and the sufficient supply of goods on the market, the negative factors brought about by the contradiction between supply and demand still dominate.

Source: Zhuo Chuang Information

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