Introduction: Driven by geopolitical tensions in the Middle East, international crude oil prices have risen, leading to a significant increase in the price of feedstock benzene. This strong cost-side pressure, coupled with relatively stable spot supply and demand for cyclohexanone, has resulted in a firm and upward trend in the domestic cyclohexanone market.

High Feedstock Benzene Prices Drive Cyclohexanone Upwards

Price Comparison Table for Cyclohexanone and Related Products (Unit: RMB/ton)

| Product | Region/Specification | Apr 3 | Feb 27 | Change (Value) | Change (%) |
| :-------------- | :------------------------- | :------ | :------ | :------------- | :--------- |
| Benzene | East China | 8,765 | 6,090 | +2,675 | +43.92% |
| Cyclohexanone | East China | 10,200 | 7,525 | +2,675 | +35.55% |
| Caprolactam | East China | 13,500 | 10,050 | +3,450 | +34.33% |
| PA6 | East China (Conventional) | 13,700 | 10,700 | +3,000 | +28.04% |

Data Source: chempricehub

Geopolitical tensions in the Middle East have led to sustained increases in international crude oil prices, triggering a collective surge in the domestic chemical feedstock market.

The price of feedstock benzene experienced a sharp rise followed by a significant decline. Sinopec's listed price was RMB 6,150/ton at the end of February. After several adjustments and fluctuations, the current Sinopec listed price stands at RMB 9,000/ton, reflecting an overall upward trend. The operating rates of commodity cyclohexanone units have shown little fluctuation, resulting in relatively stable spot supply. Downstream users maintain a just-needed procurement pace. The primary driver for cyclohexanone price movements remains the price trend of feedstock benzene. As of April 3rd, the quoted price for cyclohexanone in the East China market is around RMB 10,100-10,300/ton, representing an increase of RMB 2,675/ton or approximately 35.55% compared to February 27th.

High Feedstock Prices Pressure Cyclohexanone Industry Profits

From a profitability perspective, although cyclohexanone prices have risen alongside feedstock benzene, the increase has largely mirrored the benzene price trend. Consequently, cyclohexanone production remains in a loss-making state. As of April 3rd, the hydration process for cyclohexanone is estimated to incur a loss of about RMB 65/ton, while the oxidation process shows a loss of approximately RMB 1,065/ton. (Note: Oxidation process profit calculation is based on purchased benzene, though most oxidation units primarily use self-produced or externally sourced cyclohexane.)

Supply-Side Status: Stable Capacity but Significant Divergence

| Producer | Capacity (10k tons/year) | Unit Status |
| :---------------- | :----------------------- | :-------------------------------------------- |
| Yangmei Fengxi | 6 | Operating normally, limited external sales |
| Dongming Xuyang | 37 | Primarily for captive use |
| Hualu Hengsheng | 52 | Operating normally, limited external sales |
| Weiming Petrochemical | 15 | Shutdown |
| Jiangsu Haili | 30 | Shutdown |
| Inner Mongolia Qinghua | 20 | Operating normally |
| Henan Shouheng | 20 | Unit restarted in mid-March |
| Chongqing Huafeng | 20 | Operating normally, external sales |
| Fujian Shenma | 80 | Primarily for captive use, limited external sales |

Data Source: chempricehub

According to statistics from chempricehub, although some enterprises like Weiming Petrochemical and Jiangsu Haili are in a shutdown state, and Henan Shouheng restarted in mid-March, major producers such as Hualu Hengsheng, Inner Mongolia Qinghua, and Chongqing Huafeng are operating normally, maintaining stable volumes of external sales. Therefore, spot supply of cyclohexanone remains at a stable level. Furthermore, influenced by the ongoing integration trend between cyclohexanone and caprolactam production, most downstream caprolactam enterprises have synchronized supporting cyclohexanone units. Only a few have not yet achieved this integration, and some caprolactam producers with supply gaps currently have no demand for cyclohexanone orders, with only a few making just-needed purchases. Overall, the commodity cyclohexanone market exhibits weak supply and demand.

Cost and Supply-Demand Dynamics to Drive Range-Bound Fluctuations

The spot cyclohexanone market is expected to follow feedstock prices in a range-bound pattern in the coming period. On the supply side, the capacity utilization rate of commodity units is unlikely to fluctuate significantly, keeping spot supply relatively stable. On the demand side, the deepening integration trend between cyclohexanone and caprolactam means most downstream caprolactam producers have their own cyclohexanone facilities. Downstream chemical fiber producers purchase based on demand, showing low enthusiasm for following high prices. Regarding feedstock costs, the decline in benzene supply is greater than the drop in demand, with active port withdrawals indicating market expectations of future supply tightness. If crude oil prices continue to rise, it will further boost buying sentiment among benzene market participants. Cyclohexanone costs are therefore expected to maintain some level of support.