Caprolactam: Can Cost Push The Market To Reverse?

In late November, the domestic caprolactam market has gradually bottomed out, and the market price has dropped to the lowest level in the year. However, the upstream benzene market continues to rise. In the face of the pressure of continuous rising costs, caprolactam manufacturers can only follow up with the raw materials, but the market has been blocked up because of weak demand.

Source: LIAN

Since October, the domestic caprolactam market has begun to rise in the second wave of the year, and by the end of November, with the support of the caprolactam plant centralized maintenance, the market began to slow down, the market prices gradually bottomed out, and the price of liquid market in East China fell to the lowest level of 10500-10600 yuan / ton. Since the beginning of this week, with the rising price of benzene in the upper reaches, the cost pressure of caprolactam manufacturers has been increasing, and the industry has already been in the mire of continuous losses. Caprolactam manufacturers are getting more and more strong, but at present, the market supply and demand is weak, and the market resistance is bigger. For the future market, we must not be blindly optimistic.

First of all, from the upstream raw materials, the recent market trend of benzene market is stronger and cost push is enhanced. The external market of pure benzene continued to rise, remained upside down relative to domestic trade, and cost support was strengthened. The high price of enterprises still had room to increase, and the short-term market continued to run high.

Under the pressure of high cost, the loss of caprolactam enterprises continued to increase. Since late October, caprolactam enterprises have begun to fall into a state of loss. Up to now, the average loss of manufacturers has reached 1500 yuan / ton. In the face of high pressure of raw materials, caprolactam manufacturers have a strong mentality and are reluctant to sell at low prices.

Secondly, from the perspective of market supply, after a wave of maintenance in mid 11 months, factory maintenance began to decrease in December, and the overall supply of industry increased steadily. Some manufacturers' inventory pressure is increasing, which is a drag on market growth.

Again, downstream demand, the downstream polyamide chips Market has improved, but the overall rally is limited, the polymerization plant has not yet started noticeably, the caprolactam demand is still in a downturn, the downstream chase is more cautious, the overall market turnover atmosphere is light. Short term demand will still be difficult to improve.

According to LIAN, at present, the caprolactam market has ushered in a short wave of upward repair market, the upstream benzene market is strong, the cost still has certain support for the market, and the manufacturers are losing more pressure. The manufacturers have a strong intention, but at present, the supply and demand side of the market continues to be weak, and at the end of the year, the manufacturers still have certain shipping demand, which will suppress the market upward space. It is expected that the caprolactam market will rebound more slowly in the late stage.