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Caprolactam: Strong rebound trend after bottoming out
2023/8/22
Recently, the caprolactam market has bottomed out and rebounded after entering July, with a significant increase. As of August 8th, the spot market price of caprolactam in the East China market was 13200 yuan (ton price, the same below), an increase of 1450 yuan from the low point in July.
Under the dual support of cost and supply, it is expected that the caprolactam market will continue to maintain a strong situation in the near future, with the price center following the fluctuations of raw materials. "Industry insiders such as Zhuang Xiaohua, an analyst of caprolactam at Longzhong Information, believe.
Strong cost support
Pure benzene is the main factor affecting the price of caprolactam. Since July, the price of pure benzene, the main raw material of caprolactam, has risen strongly. Sinopec's listed price of pure benzene has increased by a total of 1000 yuan to 7200 yuan, an increase of 16.13%. The prices of auxiliary materials such as hydrogen peroxide, sulfuric acid, and synthetic ammonia have also increased by 37.31%, 5.88%, and 13.21%, respectively. The price increase of main and auxiliary materials directly pushed up the comprehensive cost of caprolactam, which has increased by 16.12%, "said Gong Yuqian, an analyst with Caprolactam at Zhuochuang Information.
The rise in international crude oil prices has also boosted the prices of chemical products. Recently, international crude oil prices have continued to rise. As of August 4th, the settlement price of the main contract for West Texas light crude oil futures on the New York Mercantile Exchange was $81.55 per barrel, a month on month increase of 1.82%; The settlement price of the main contract for Brent crude oil futures on the Intercontinental Exchange was $85.14 per barrel, up 1.07% month on month.
Due to factors such as the rise in crude oil prices, improved supply and demand patterns, and increased demand for ethylbenzene driven by finished oil consumption taxes, pure benzene prices have continued to fluctuate at high levels, "said Zhuang Xiaohua.
In the later stage, the support for crude oil production reduction remains stable, and news such as tight market supply and China's planned economic stimulus policies continue to bring positive news to the market. According to analysis by Zhuochuang Information, based on the current crude oil price, the crude oil change rate at the beginning of the new pricing cycle is still within a positive range, with an initial estimate of around 175 yuan. Overall, crude oil prices may fluctuate at high levels, and there is still expectation of consecutive increases. The support for the pure benzene market from the raw material end is still there.
Auxiliary hydrogen peroxide resources are tight, and inventory is currently at a low level. Although there is cost pressure downstream, the continuous procurement of enterprises does not have the conditions for significant price reductions, and short-term prices may continue to fluctuate at high levels, "said Xue Dongmei, an hydrogen peroxide analyst at Longzhong Information.
Tight supply of goods in circulation
On July 21st, the overall operating rate of caprolactam was 81.33%. Except for some units that have been shut down for a long time, other units are basically operating normally. In the short term, due to the low inventory of caprolactam in the early stage, especially the slightly tight shipment in the northern region, and the current upward trend in the market, downstream purchasing enthusiasm is strong, and the supply of caprolactam in some northern regions is still slightly tight, "said Zhuang Xiaohua.
Cangzhou Xuyang Chemical Co., Ltd. originally planned to restart the 150000 ton/year caprolactam maintenance device in early July, but the delay ultimately resulted in a lower than expected recovery of caprolactam supply in July. Coupled with the fact that some companies that had previously supplied spot goods turned to self use, the caprolactam spot quantity was tight, and production companies maintained low inventory, "Gong Yuqian said.
Currently, the 400000 ton/year caprolactam unit of Nanjing DSM Oriental Chemical Co., Ltd. is operating at 50% load; At the end of July and early August, Zhejiang Juhua's 100000 ton/year plant and Hubei Sanning Chemical Co., Ltd.'s 140000 ton/year caprolactam plant have a one week maintenance plan; In August, Sinopec Baling Petrochemical Co., Ltd. reduced the shutdown of a 100000 ton/year caprolactam unit; China Pingmei Shenma Group Nylon Technology Co., Ltd. has a short-term maintenance plan for its 200000 ton/year device, which will exacerbate the trend of tight supply of caprolactam in the market.
Steady follow-up of demand
In July, the overall operating rate of downstream nylon 6 (PA6) increased, leading to an increase in demand for caprolactam. Due to the low raw material inventory of PA6 enterprises, a relatively stable supply of caprolactam is maintained. The steady follow-up of demand provides favorable support for the price of caprolactam, "said Gong Yuqian.
Recently, the utilization rate of PA6 polymerization capacity has increased simultaneously with caprolactam, reaching around 76%; the weekly production of PA6 chips and caprolactam has also increased to nearly 100000 tons. Due to the low inventory of raw materials in PA6 enterprises, as the overall operating rate of PA6 polymerization increases, the consumption of caprolactam will increase, "said Zhuang Xiaohua.
Although the demand for caprolactam is single, the downstream demand for PA6 is diverse. Currently, with the support of the recovery of high-speed spinning demand, the production of PA6 polymerization is progressing well, and the demand for PA6 high-speed spinning in the later stage is still optimistic. Conventional spinning and slicing enterprises are under pressure to keep up with inventory. However, due to the low inventory of raw materials in the terminal stage and some rigid procurement needs, coupled with the fact that many northern conventional spinning and slicing enterprises have their own raw materials, the current production has remained stable. These positive factors have supported the caprolactam market.
Industry insiders analyze that in the context of overcapacity in the industry, the future market will still need to pay attention to the driving force of cost increases and the process of downstream transmission. At the same time, attention should also be paid to supply changes and downstream demand feedback.
Under the dual support of cost and supply, it is expected that the caprolactam market will continue to maintain a strong situation in the near future, with the price center following the fluctuations of raw materials. "Industry insiders such as Zhuang Xiaohua, an analyst of caprolactam at Longzhong Information, believe.
Strong cost support
Pure benzene is the main factor affecting the price of caprolactam. Since July, the price of pure benzene, the main raw material of caprolactam, has risen strongly. Sinopec's listed price of pure benzene has increased by a total of 1000 yuan to 7200 yuan, an increase of 16.13%. The prices of auxiliary materials such as hydrogen peroxide, sulfuric acid, and synthetic ammonia have also increased by 37.31%, 5.88%, and 13.21%, respectively. The price increase of main and auxiliary materials directly pushed up the comprehensive cost of caprolactam, which has increased by 16.12%, "said Gong Yuqian, an analyst with Caprolactam at Zhuochuang Information.
The rise in international crude oil prices has also boosted the prices of chemical products. Recently, international crude oil prices have continued to rise. As of August 4th, the settlement price of the main contract for West Texas light crude oil futures on the New York Mercantile Exchange was $81.55 per barrel, a month on month increase of 1.82%; The settlement price of the main contract for Brent crude oil futures on the Intercontinental Exchange was $85.14 per barrel, up 1.07% month on month.
Due to factors such as the rise in crude oil prices, improved supply and demand patterns, and increased demand for ethylbenzene driven by finished oil consumption taxes, pure benzene prices have continued to fluctuate at high levels, "said Zhuang Xiaohua.
In the later stage, the support for crude oil production reduction remains stable, and news such as tight market supply and China's planned economic stimulus policies continue to bring positive news to the market. According to analysis by Zhuochuang Information, based on the current crude oil price, the crude oil change rate at the beginning of the new pricing cycle is still within a positive range, with an initial estimate of around 175 yuan. Overall, crude oil prices may fluctuate at high levels, and there is still expectation of consecutive increases. The support for the pure benzene market from the raw material end is still there.
Auxiliary hydrogen peroxide resources are tight, and inventory is currently at a low level. Although there is cost pressure downstream, the continuous procurement of enterprises does not have the conditions for significant price reductions, and short-term prices may continue to fluctuate at high levels, "said Xue Dongmei, an hydrogen peroxide analyst at Longzhong Information.
Tight supply of goods in circulation
On July 21st, the overall operating rate of caprolactam was 81.33%. Except for some units that have been shut down for a long time, other units are basically operating normally. In the short term, due to the low inventory of caprolactam in the early stage, especially the slightly tight shipment in the northern region, and the current upward trend in the market, downstream purchasing enthusiasm is strong, and the supply of caprolactam in some northern regions is still slightly tight, "said Zhuang Xiaohua.
Cangzhou Xuyang Chemical Co., Ltd. originally planned to restart the 150000 ton/year caprolactam maintenance device in early July, but the delay ultimately resulted in a lower than expected recovery of caprolactam supply in July. Coupled with the fact that some companies that had previously supplied spot goods turned to self use, the caprolactam spot quantity was tight, and production companies maintained low inventory, "Gong Yuqian said.
Currently, the 400000 ton/year caprolactam unit of Nanjing DSM Oriental Chemical Co., Ltd. is operating at 50% load; At the end of July and early August, Zhejiang Juhua's 100000 ton/year plant and Hubei Sanning Chemical Co., Ltd.'s 140000 ton/year caprolactam plant have a one week maintenance plan; In August, Sinopec Baling Petrochemical Co., Ltd. reduced the shutdown of a 100000 ton/year caprolactam unit; China Pingmei Shenma Group Nylon Technology Co., Ltd. has a short-term maintenance plan for its 200000 ton/year device, which will exacerbate the trend of tight supply of caprolactam in the market.
Steady follow-up of demand
In July, the overall operating rate of downstream nylon 6 (PA6) increased, leading to an increase in demand for caprolactam. Due to the low raw material inventory of PA6 enterprises, a relatively stable supply of caprolactam is maintained. The steady follow-up of demand provides favorable support for the price of caprolactam, "said Gong Yuqian.
Recently, the utilization rate of PA6 polymerization capacity has increased simultaneously with caprolactam, reaching around 76%; the weekly production of PA6 chips and caprolactam has also increased to nearly 100000 tons. Due to the low inventory of raw materials in PA6 enterprises, as the overall operating rate of PA6 polymerization increases, the consumption of caprolactam will increase, "said Zhuang Xiaohua.
Although the demand for caprolactam is single, the downstream demand for PA6 is diverse. Currently, with the support of the recovery of high-speed spinning demand, the production of PA6 polymerization is progressing well, and the demand for PA6 high-speed spinning in the later stage is still optimistic. Conventional spinning and slicing enterprises are under pressure to keep up with inventory. However, due to the low inventory of raw materials in the terminal stage and some rigid procurement needs, coupled with the fact that many northern conventional spinning and slicing enterprises have their own raw materials, the current production has remained stable. These positive factors have supported the caprolactam market.
Industry insiders analyze that in the context of overcapacity in the industry, the future market will still need to pay attention to the driving force of cost increases and the process of downstream transmission. At the same time, attention should also be paid to supply changes and downstream demand feedback.
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