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Bearish demand and stockpiling: stabilized the Cyclohexanone market

Bearish demand and stockpiling: stabilized the Cyclohexanone market

Bearish demand and stockpiling: stabilized the Cyclohexanone market

  • 20-May-2022 8:28 AM
  • Journalist: Peter Schmidt

The overall Cyclohexanone market remained stable in China due to the reduction in demand across the region and poor downstream production. In addition, the other factors that resulted in the price stabilization are the upstream price fluctuation and slow trade activities.

The upstream crude values have been impacted by reduced consumption from the Chinese market due to the lockdown limitations and Saudi Aramco's oil price drop in Asia. The feedstock benzene and cyclohexane values have been affected by this fluctuation, which has impacted Cyclohexanone pricing. Furthermore, after the May day holiday, the lockdown was relaxed, allowing for increased productivity.

China is a major exporter of Cyclohexanone in the Asia Pacific region. However, due to the maintenance shutdown of Mitsubishi Chemical in Japan, demand in the region has declined. Because Japan is a significant importer of Cyclohexanone from China, the plant's closure lowered buyer confidence. One of the merchants said, "The downstream Caprolactam is in loss, but the manufacturers are still bidding firm". As a result, demand for downstream Caprolactam remained low, causing Cyclohexanone prices to remain stable.

Moreover, the lack of demand from the regional market had an impact on trade, resulting in lower export dynamics. Cyclohexanone was readily available due to stockpiling following the stoppage of imports in Japan, prompting suppliers to maintain a consistent pricing trend. Despite the Chinese lockdown being lessening and production units having resumed, demand for Cyclohexanone has continued to decline in the local market.

According to the ChemAnalyst, "The prices of Cyclohexanone might rise in the upcoming weeks as the demand for the downstream Caprolactam is likely to rise. The supply and buying activities are expected to grow in the domestic and regional markets. However, the Freight charges are skyrocketing, and it could also inflict the Cyclohexanone market. Also, the upstream crude values may ride up further, affecting the feedstocks, which can positively impact the Cyclohexanone pricing".

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