Introduction: Driven by the dual tailwinds of high costs and tight supply, the caprolactam market continues its upward trend, with spot prices gradually climbing. Downstream sectors are following suit passively. Moving forward, close attention should be paid to changes in the cost side and the pace of demand-side transmission.

In the first quarter of 2026, caprolactam prices fluctuated upwards. Supply-side production cuts continued, with companies maintaining relatively conservative operating rates. The overall capacity utilization rate was around 80% in January. In February, demand declined due to the Spring Festival holiday, leading to a corresponding reduction in caprolactam supply, with most companies' capacity utilization falling to around 70%. In March, caprolactam operating rates recovered to nearly 80%, and supply increased. Concurrently, downstream demand gradually recovered. Overall, the caprolactam supply situation remained tight throughout the first quarter. Furthermore, influenced by the Middle East situation, prices of crude oil, benzene, sulfur, and other related products rose in tandem, keeping cost pressures on caprolactam producers persistently high and prompting them to actively support prices.

Recently, the caprolactam market has continued the strong upward momentum seen in March, with the spot price center further rising. As of April 3rd, the spot price for caprolactam in the East China market had increased to 13,500 RMB/ton on a delivered, acceptance-paid basis.

Although benzene spot prices have experienced some fluctuations, the overall price trend is upward. Sinopec's benzene挂牌 price rose to 9,000 RMB/ton and has since stabilized. Support for the benzene market is concentrated in expectations of tighter domestic supply going forward, a significant drop in import arrivals, stable rigid demand from downstream procurement, and continuous destocking at East China ports, keeping benzene prices elevated. The sulfur market has also seen strong price increases, supported by tight supply and insufficient imports. Sulfur prices at East China ports rose to a high of 6,200 RMB/ton, an increase of 2,150 RMB/ton or 53% compared to 4,050 RMB/ton on February 27th. The continuous climb in raw material prices has kept cost pressures on caprolactam producers high.

Simultaneously, the tight supply structure provides solid impetus for producers to maintain firm prices. Total caprolactam production in Q1 was 1.6531 million tons, while PA6 chip polymerization output was 1.6487 million tons. Considering consumption in hexamethylenediamine and engineering plastics sectors, the overall caprolactam supply remains tight. In April, Hunan Petrochemical's 600 ktpa unit is scheduled for a full shutdown for about 10 days. Xuyang Group's caprolactam units will undergo a 50-day rotational inspection from April 1st to May 20th. Specifically: from April 1st to 5th, the second-phase unit at Dongming Xuyang will replace membrane tubes for 5 days; from April 6th to 15th, the first-phase 150 ktpa unit at Dongming Xuyang will undergo maintenance for 10 days; from April 16th to May 20th, the second-phase 360 ktpa unit at Cangzhou Xuyang will undergo maintenance for 35 days. Yongrong Technology plans to shut down one production line for about a week. Given the maintenance of these multiple large-scale units in April, caprolactam production is expected to decline, further tightening the supply structure.

Considering the above fundamental factors, supportive tailwinds from the cost and supply sides for caprolactam persist. Benzene production is expected to decrease in April, port inventories are destocking, and benzene's own supply-demand fundamentals are improving. If crude oil prices remain firm, benzene is expected to continue following a strong trend. In April, scheduled arrivals of solid sulfur at major domestic ports are limited. Insufficient import replenishment has already pushed port inventories to multi-year lows for the same period. Sulfur prices are also expected to remain high in the future.

The demand side exhibits characteristics of passive cost transmission. The significant increase in costs has driven PA6 polymerization companies to raise prices, with PA6 chip prices following suit. In April, as previously profitable inventories in the market are consumed, low-priced sources will decrease, and prices may continue to rise passively. Overall, the caprolactam market is expected to remain firm and strong in the short term. Continued attention should be paid to changes in the cost side and the pace of demand-side transmission going forward.