Introduction: The caprolactam market has recently experienced a staged rebound. The rapid rise in upstream pure benzene prices has strengthened cost support. Meanwhile, some caprolactam plants have reduced output or shut down, leading to a decline in supply and a tightening supply pattern. The improved supply support has helped caprolactam prices stabilize and rebound.
Pure benzene prices rebound quickly, caprolactam costs strengthen
Recently, the pure benzene market has been boosted by multiple positive factors. Cost-side crude oil has surged; additionally, several domestic pure benzene supply units are undergoing concentrated maintenance, leading to a continuous reduction in market circulation. Port inventory remains low and continues to decline, with tight spot supply. Holders have strong bullish expectations and generally support prices while being reluctant to sell. Although demand is weak, downstream rigid demand for raw material inventory consumption remains at low levels, and just-in-need procurement is steadily released. End-users follow raw material price increases to replenish as needed, providing stable support for demand. Pure benzene prices have recently risen in a volatile manner. This week, Sinopec raised its pure benzene listing price by 400 yuan/ton to 7,300 yuan/ton, with the spot price in the East China market around 7,400 yuan/ton.
Caprolactam companies' losses deepen, continue to cut loads and reduce output
As pure benzene prices continued to rise this week, sulfur prices rebounded slightly. Although caprolactam prices have edged up, the pace of increase is slightly slower. Combined with the decline in by-product ammonium sulfate prices, caprolactam losses have deepened.
According to Chempricehub data, this week the production gross margin of caprolactam was -2,446 yuan/ton, down 90 yuan/ton from the previous period. The gross margin for caprolactam plants was -798 yuan/ton, down 262 yuan/ton from the previous period.
Under sustained losses, caprolactam companies have reduced production enthusiasm. Recently, more caprolactam plants have cut loads or shut down. Previously, the capacity utilization rate of caprolactam companies was mostly around 70%. Now, with Luxi's Phase III plant under maintenance, Shenma continuing to cut loads, and Shanxi Lubao shutting down, caprolactam supply continues to shrink. The capacity utilization rate has dropped to 65.41%, and the supply pattern remains tight.
Caprolactam plant operation summary table
| Company Name | Capacity (10,000 tons) | Plant Status |
|---|---|---|
| Cangzhou Xuyang | 62 | Overall load below 60%. |
| Dongming Xuyang | 30 | Load around 80%. |
| Shanxi Lubao | 10 | Planned shutdown. |
| Shanxi Yangmei | 30 | 200,000-ton plant operating normally; 100,000-ton plant shut down. |
| Shanxi Lanhua | 14 | Plant shut down. |
| Luxi Chemical | 65 | Phase III under maintenance; only Phase II operating normally. |
| Nanjing Dongfang | 40 | Plant shut down. |
| Baling Hengyi | 50 | Load around 60%. |
| Zhejiang Juhua | 10 | Plant shut down. |
| Fujian Tianchen | 35 | Load around 70%. |
| Fujian Shenyuan | 100 | Load around 90%. |
| Yongrong Technology | 65 | Load around 85%. |
| Pingmei Shenma | 38 | Load 40-50%. |
| Hunan Petrochemical | 60 | Load around 80%. |
| Hubei Sanning | 75 | Load 70%. |
| Hualu Hengsheng | 40 | Load 70%. |
| Lunan Chemical | 40 | Load 60-70%. |
| Guangxi Hengyi | 60 | Load 70%. |
| Total | 824 | Load as of July 10: 65.41%. |
Cost and supply side positive support drives caprolactam prices to stop falling and rebound
Upstream crude oil prices have rebounded, pure benzene prices have risen rapidly, and Sinopec raised its pure benzene listing price by 400 yuan/ton to 7,300 yuan/ton, strengthening cost support for caprolactam. Coupled with reduced caprolactam supply and a persistently tight supply pattern, the caprolactam market has stopped declining and rebounded. Companies have raised their quotations, with some caprolactam companies offering up to 11,400 yuan/ton. Some small-lot just-in-need transactions have been concluded.
Short-term cost supports caprolactam prices to remain strong; supply-demand may continue to contend later
Costs: Upstream pure benzene prices are slightly consolidation, sulfur prices remain high, and the comprehensive production cost of caprolactam remains elevated. The industry continues to incur losses. Due to loss constraints, producers continue to support prices, providing rigid support for product prices.
Supply: Recently, multiple caprolactam plants have maintained load reduction or shutdown status, with the overall industry operating rate at a low level, and supply continues to shrink. Company inventories remain low across the board, leading to a tight supply pattern. The dual positive support from costs and supply underpins the strong performance of caprolactam spot prices.
Demand remains the core shortfall constraining raw material price increases, with insufficient follow-through momentum. Downstream PA6 polymerization companies only maintain just-in-need replenishment. As caprolactam raw material prices rebound, PA6 producers face increasing cost pressure, and the resistance to passing on prices to downstream end-users is growing. Currently, downstream chip market traders and end-users are mainly replenishing at low levels. Additionally, the high-speed spinning sector is in the traditional demand off-season, with operating loads for spinning and weaving declining. The overall weak demand follow-through from end-users may continue to suppress price increases.
In summary, the caprolactam market is in a "strong cost, tight supply, weak demand" game pattern. In the short term, prices are running strong supported by costs and tight supply. In the later stage, attention should be paid to the transmission of demand.
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