As one of the important raw materials in the chemical fiber industry – caprolactam, the market price of caprolactam has continued to rise since November last year, even during the Spring Festival. It has attracted a lot of attention among the brothers of benzene chain chemicals, but recently it has It has collapsed like a wilted balloon. Since March, it has dropped hundreds or even a thousand dollars every day. If caprolactam also had electronic trading, it would probably end up falling by the limit every day.
Since the beginning of this year, the highest transaction price of caprolactam appeared at the end of February, reaching 19,500-19,600 yuan/ton. The current price (on the 22nd) is around 15,700-15,750 yuan/ton, a drop of 15%. Its initial decline was at the beginning of this month. , just as the market price began to skyrocket at the beginning, the price this time was also driven by the dual negative effects of the cost side and the demand side.
Insufficient cost support, crude oil, pure benzene, and caprolactam “all suffer”!
As can be seen from the above chart, since the market price of pure benzene started to rise in November last year, the first wave of downward trend experienced was around New Year’s Day. However, because the price of caprolactam was relatively strong, it was not affected by it. The current downward trend is currently going on. The second wave of turbulent decline can be described as fierce, and the continued sluggishness of crude oil has made things worse. As of now, the actual transaction price of pure benzene market has dropped to around 6,800 yuan/ton, which is nearly 2,200 yuan/ton lower than the highest value in February. The decline reached 24.4%.
With high inventory and low demand, a caprolactam manufacturer has stopped its installation!
Entering March, the operating rate of the caprolactam factory has almost reached over 90%, and almost all operational devices are in operation. As the terminal silk factory has rapidly reduced demand as the downstream industry slows down, in addition, the inventory pressure of chip manufacturers has increased sharply. , its operating rate has also dropped from the previous 75% to 67%, which shows that downstream demand has significantly weakened, and various factors have led to a sudden drop in market demand for caprolactam.
Faced with a sluggish market and rapidly increasing inventories, caprolactam manufacturers have to reduce production and even shut down for maintenance. According to sources, due to a significant drop in demand from downstream polymerization plants and high pressure on caprolactam inventories, a production line at Haili Chemical’s Jiangsu Dafeng caprolactam unit is scheduled to be shut down starting on the 17th.
Under the current situation where the buyer’s market dominates, the mentality of caprolactam manufacturers has also undergone significant changes. From the previous reluctance to sell to the current focus on shipments and destocking, they even take the initiative to offer profits and reduce prices.
Affected by factors such as the negative cost and demand side, as well as the light trading atmosphere in the downstream nylon market, some caprolactam companies are currently optimistic about the market outlook. From this point of view, only when the price of caprolactam drops to a price that downstream manufacturers can afford can smooth shipments be achieved. However, currently caprolactam manufacturers have considerable profits and there is still room for price reduction. It is expected that the price will still fall steadily in the future.
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