Introduction: After late November, the domestic caprolactam market gradually bottomed out, with market prices falling to annual lows. However, the upstream pure benzene market continues to rise. Faced with rising cost pressure, caprolactam manufacturers can only While following the rise in raw materials, the market has faced many obstacles to rising due to weak demand.
Data source: Jin Lianchuang
Since October, the domestic caprolactam market has begun to experience a second wave of sharp declines during the year. By late November , supported by the centralized maintenance of caprolactam manufacturers’ equipment, the market decline began to slow down, and the market price gradually bottomed out. The liquid market price in East China fell to a low of 10,500-10,600 yuan/ton. Since the beginning of this week, as the price of upstream pure benzene has increased, the production cost pressure of caprolactam manufacturers has gradually increased, and the industry has already fallen into the quagmire of continuous losses. Caprolactam manufacturers have a strong mentality of pulling up. However, the current market supply and demand side is weak, and the resistance to market growth is relatively small. big. We must not be blindly optimistic about the market outlook.
First of all, from the perspective of upstream raw materials, the recent trend of the upstream pure benzene market has been relatively strong, and the cost push has increased. The external market of pure benzene continues to rise, and remains inverted relative to domestic trade. Cost support has been strengthened. Enterprise prices are high, and there is still room for improvement. The short-term market continues to operate at a high level.
Under the pressure of high costs, the losses of caprolactam companies continue to increase. Since late October, caprolactam companies have begun to fall into a state of loss, and now the average loss of manufacturers has reached more than 1,500 yuan/ton. Faced with rising pressure on raw materials, caprolactam manufacturers have a strong push-up mentality and are reluctant to sell at low prices in the market.
Secondly, from the perspective of the market’s own supply, after a wave of maintenance in mid-to-late November, factory equipment maintenance began to decrease starting in December, the overall supply of the industry has steadily increased, and market resources have in a relatively affluent state. The inventory pressure of some manufacturers has increased, which has exerted a certain drag on the market rise.
Thirdly, from the perspective of downstream demand, the current downstream nylon chip market has improved, but the overall increase has been limited. There has been no significant improvement in the start of polymerization manufacturers, and the demand for caprolactam remains sluggish. , downstream investors are more cautious in chasing gains, and the overall market transaction atmosphere is weak. Short-term demand will still be difficult to improve.
According to Jin Lianchuang, the caprolactam market is currently undergoing a short-term upward recovery. The upstream pure benzene market is strong, costs still support the market, and manufacturers’ losses are intensifying the pressure. However, the current supply and demand side of the market continues to be weak, and manufacturers still have a certain demand for shipments at the end of the year, which puts a certain pressure on the upward potential of the market. It is expected that the overall rebound of the caprolactam market will be weak in the later period.
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