Caprolactam Prices are Expected to Decline in UAE

The prices of Caprolactam have fallen in the domestic market with costs ranging from USD 2478/ton to USD 2627/ton Caprolactam CFR Jebel Ali with a weekly decline of 0.2% as per recorded by the Chem Analyst pricing team on June 10. Stable downstream market demand from engineering plastics, pharmaceuticals, automotive plastic parts, and housing enterprises have pushed the prices of Caprolactam downwards in the UAE.

The decline in the prices of Caprolactam from the exporting countries like China and South Korea, as well as variating costs of upstream feedstock KA Oil in the global market due to the ongoing war between Russia and Ukraine, supported the downtrend in the UAE market. As per sources, China's Caprolactam liquid market maintained stable operation according to data collected on June 13. The decline in downstream Caprolactam prices and the closure of specific manufacturing facilities dominated the upstream feedstock Cyclohexanone market dynamics.

Due to low demand from downstream synthetic fibre sectors, Caprolactam's downward trend has led to Cyclohexanone's bearish demand, therefore, Crude Oil demand in the Chinese market dropped further. Cyclohexanone supplies and demand fundamentals have been impacted by the accumulation of Caprolactam which was caused by Japan's ban on its sale to South Korea. Further, there was a negative market sentiment in Japan's downstream chemicals, pharmaceuticals, and automobile sectors.

 Aside from the above, Mitsubishi Chemical's cracker was shut down for maintenance turnaround, fuelling the price drop for Cyclohexanone. This led to an increase in inventories and more Caprolactam stockpiled with the traders and suppliers in the regional UAE market. According to some reports, the erosion of demand from the world's largest commodity consumer has already dragged down Engineering Plastics prices. Several downturns and stoppages have been reported by our consultants in China and worldwide in the Caprolactam chemical subsectors.

As per Chem Analyst, the raw materials and terminal markets fell together, cost support weakened, and downstream demand weakened, resulting in a poor market for Caprolactam. In the future, it is expected that the Caprolactam market will consolidate, and the market may drop again.