Caprolactam Quarterly Review And Two Quarter Forecast

The caprolactam market first rose and then fell in the first quarter of 2020. Early American air strikes led to the death of senior officials in Iran. The escalation of the conflict between the United States and Iraq triggered a rise in crude oil prices, and the price of the kinetic energy sector rose. Pure benzene in the periphery of good support, the East China market prices back to 6000 yuan / ton near. The price of raw materials increased, and the loss of caprolactam increased. In addition, the caprolactam plant in North China started to operate at a low level, resulting in tight supply of caprolactam. In addition, the market is more optimistic about the market expectations after the Spring Festival, and the positive preparation of the former and the lower reaches continued to promote the caprolactam market. Sinopec's caprolactam settlement price was 11650 yuan / ton in January 2020, and the liquid spot price in East China market rose to 11300-11400 yuan / ton before delivery. After the Spring Festival, the market began to go downhill. Firstly, due to the ferment of domestic public health incidents, the extension of domestic holidays, the restriction of personnel flow and logistics and transportation, the delayed demand for the caprolactam and PA6 was not restored as scheduled after the delay of the downstream work in the following year, and the manufacturers were in normal production during the Spring Festival. The market price of caprolactam entered the first round of rapid decline, falling from 11300-11400 yuan / ton before the Spring Festival to 10200-10400 yuan / ton, and Sinopec's February settlement dropped to 11100 yuan / ton. In the late March, when the demand impact of domestic epidemic has not yet been restored, Russia failed to reach an agreement on OPEC + production cuts in March. Russia's refusal to cut production and Saudi Arabia's price war led to an epic decline in crude oil prices, and superimposed the factors of foreign outbreak. Global commodity and financial markets were in panic, crude oil and stock index continued to plummet, and crude oil WTI fell below 25 U.S. dollars / barrel price. The US stock market has experienced three fuses in the short term. The demand for caprolactam was insufficient and the cost collapsed. The market experienced a second round of rapid decline. At the end of March, the liquid price in the East China market dropped to 7800 yuan / ton acceptance.

Fig. 1 price trend of caprolactam Market

time	One month	Two month	Three month
Two thousand and thirteen year	Eighteen thousand seven hundred and fifty-five	Twenty thousand one hundred and fifty-six	Nineteen thousand one hundred and thirty-eight
Two thousand and nineteen year	Twelve thousand seven hundred and thirty-seven	Thirteen thousand three hundred and seventy-one	Thirteen thousand nine hundred and thirty-one
Two thousand and twenty year	Eleven thousand two hundred and forty-four	Ten thousand seven hundred and twenty	Nine thousand two hundred and twenty-five

In 2020 1-3, the total output of caprolactam was 764 thousand and 800 tons, which was 80 thousand and 600 tons lower than that in 2019, 1-3 months.

Fig. 2 Comparison of caprolactam production in the first quarter

The two quarter forecast: the two quarter market is expected to be mainly affected by three factors, including crude oil, domestic demand and foreign demand. In terms of crude oil, the basic weakness of crude oil has not changed at present. Russia and Saudi Arabia will increase crude oil output in April. Under the circumstances of OPEC's reduction in output, the crude oil will continue to operate under pressure. However, the crude oil market is also the most influential factor in the two quarter, and its specific trend depends on the specific circumstances. Domestic demand is approaching the end of the domestic epidemic control. It is estimated that domestic demand will gradually recover in the two quarter, and domestic demand will be better than the first quarter. Foreign demand situation, outbreak of foreign epidemic in 3-4 months, and from the point of view of prevention and control of foreign epidemics is expected to continue for a longer time, it is expected that foreign epidemics continue to the second half of the year, so the two quarter of foreign demand will continue to decline. On the whole, the caprolactam market's overall support in the two quarter is limited, and the 4-5 month is the lowest in the year.