Lead: The caprolactam market experienced a strong rally in the first quarter of 2026 driven by cost factors, but after April, prices retreated from highs due to weak demand follow-through. Entering May, with upstream crude oil and benzene prices fluctuating at high levels, continued production cuts by caprolactam enterprises, and persistently weak demand, the caprolactam market fundamentals are a mix of bullish and bearish factors. As supply-side load adjustments take effect, the market may enter a rebalancing phase.

High原料价格反复波动，己内酰胺成本压力较大

After March, the escalation of the Middle East situation disrupted global energy and chemical supply chains, keeping benzene prices persistently high. In April, the average spot price of benzene in the East China market rose to 8,651 yuan/ton. After the May Day holiday, the benzene market experienced wide fluctuations. Post-holiday concentrated resumption of downstream operations and restocking supported a temporary surge in benzene prices. Subsequently, geopolitical tensions eased, international crude oil fell sharply, and benzene prices followed crude oil under pressure. As of May 8, the benzene spot price in the East China market was 8,325 yuan/ton, and Sinopec's listed benzene price was cut by 350 to 8,500 yuan/ton. With benzene prices falling, caprolactam costs decreased slightly. However, given the still high sulfur prices after the holiday, the overall cost pressure on caprolactam remains significant. Nevertheless, the decline in crude oil and benzene prices has negatively impacted downstream sentiment, with downstream players showing clear resistance to high raw material prices.

Caprolactam market weak and consolidating; demand persistently sluggish

The caprolactam market has recently been operating weakly. Demand lacks improvement momentum. Downstream PA6 continues to operate at low loads. Caprolactam supply remains loose as the restart of some earlier units has not significantly changed short-term supply volumes. Furthermore, downstream PA6 prices remain low. Regular spinning-grade PA6 chip prices are at 12,600-12,900 yuan/ton (cash delivery). The spread between chips and caprolactam remains narrow. Polymerization enterprises maintain low target purchase prices for raw materials, and spot negotiation prices are trending lower. As of Friday, the caprolactam spot price in the East China market was 12,200 yuan/ton (acceptance delivery).

May fundamentals: bullish and bearish factors interwoven; market may enter rebalancing phase

Cost side: Crude oil prices have seen periodic declines due to signs of easing in the Middle East situation, putting pressure on benzene prices. However, uncertainties remain in the US-Iran negotiation process, and concerns about potential conflicts persist, leading to volatile crude oil prices with benzene following suit. Benzene's own supply-demand fundamentals remain in a destocking cycle in May, which may limit the extent of any price decline.

Supply side: From late April to early May, as caprolactam supply recovered temporarily and downstream PA6 continued to reduce loads, the caprolactam supply situation became loose. This negatively impacted caprolactam prices and margins, with prices gradually falling back near the cost line. Caprolactam enterprises intend to further reduce operating rates in May, planning to cut loads from around 80% in April to about 70%. Some enterprises have already started reducing loads after the May Day holiday. Going forward, caprolactam supply is expected to continue to decline, shifting the supply structure from loose to balanced.

Demand side: The demand side still lacks positive catalysts. Orders in the downstream textile market are weak. The engineering plastics sector shows demand divergence, with order volumes shrinking for small and medium-sized enterprises. The overall end-user market remains weak. Downstream PA6 chip prices continue to decline, narrowing the spread with caprolactam and even leading to negative spreads at times. PA6 operating rates remain low at around 63%. Polymerization enterprises show clear resistance to high raw material prices, primarily purchasing on a need-to-buy basis and seeking lower prices.

Conclusion: Currently, the caprolactam market is weak and consolidating under the constraints of falling benzene prices and weak demand. In the future, as caprolactam operating rates decline, supply and demand will enter a rebalancing adjustment phase.