Under normal circumstances, raw material prices fell sharply. Manufacturers should be happy, but last week, Asia's caprolactam producers are increasingly worried. They worry that because of the rapid decline in the price of pure benzene, it may endanger downstream caprolactam industry profits.
At the beginning of this month, the price of pure benzene in Asia had fallen to the lowest point of 18 months since the start of the month (FOB, Korea). Last week, the spread between caprolactam and pure benzene has dropped from 1,430 US dollars/ton in early October to 1,105 US dollars/ton. Due to the close relationship between pure benzene and caprolactam, the price cut of pure benzene will inevitably lead to a sharp drop in the price of caprolactam. The sharp increase in the price of pure benzene at the beginning of the year also contributed to the increase in the price of caprolactam. It is reported that the price of Northeast Asian caprolactam had dropped to US$1,725/ton last week, which was US$415/tonne lower than that at the beginning of October. It was reported that Xiasha’s investment was lower than the price at the beginning of October. The main reason for the decline.
According to Robin McDonald of PCI Consulting, according to the experience of the past 10 years, the profitability of the caprolactam industry is better than the spread of caprolactam and pure benzene above $1,100/tonne. Since last year, caprolactam producers have raised their prices on the grounds of rising prices of pure benzene, and customers have also determined the price structure of caprolactam. Now that the price of pure benzene has fallen, customers have certainly demanded a reduction in the price of caprolactam.
Some analysts have pointed out that caprolactam producers will not be able to achieve price increases on the basis of tight supply for some time to come. Last week, the balance of supply and demand in Asia was basically balanced. It is expected that this will be the case in the coming months. The expansion of the 140,000 tons/year plant of DSM Nanjing will resume full-load production in the first quarter of next year, and the market supply capacity will increase. Although Ube Industries, Japan, closed its 90,000-ton/year caprolactam plant in Sakai for a one-month inspection, it is not expected to cause much impact on Asian market supply because the device is mainly supplied to the Japanese market.
According to PCI, the global demand for caprolactam will be reduced by 1.2% from the previous year to 3.92 million tons this year, mainly due to the decrease in demand for polyamide fibers. PCI expects caprolactam demand to increase slightly to 3.99 million tons next year, an increase of 1.5% to 2.0%.
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