Cyclohexane Market Constantly Witnessing Bullish Sentiments
- 01-Apr-2022 6:14 PM
- Journalist: Kim Chul Son
In March, the Cyclohexane market observed a persistent bullish sentiment, and the growth was majorly focused after Russia started to carry out special military operations on Ukraine in late February. The invasion brought up enormous anger in form of sanctions on Russia that scrutinizes with severe impact on the global arbitrage. The sanctions on Russian energy commodities curtailed the availability of Crude Oil from the international market at a time when the world is recovering from the impact of COVID-induced suppression in the global economy. As a repercussion, it resulted in a sudden increment in offers of Crude Oil in the international market despite levying its impact on the major downstream commodities across the region.
Whereas, In China, the prices of Cyclohexane observed consistent gyration in the market dynamics amidst the contradicting market factors. The prices of feedstock Benzene consistently gained in value by taking cost support from the increasing Crude Oil. The demand from the downstream coating industry has also been healthy. The current resurgence of COVID in China has slumped the market activities drastically and the production levels for the downstream Nylon amidst the strict restriction imposed by the Chinese authorities and the limited onloading, offloading activities at port further pressurized the market dynamics of Cyclohexane in China.
Whereas most of the manufacturers from the downstream PU industry kept the operating rates restricted specifically for limited demand against the immature production margins in the vast production capacities. In addition, the US reinstate product exclusions benefits for imported PU from China. In response, it vastly impacted the spread margins of Cyclohexane with its upstream and downstream commodities in the Chinese domestic market. The supply-demand of Cyclohexane remained weak throughout March, under the cost pressure and reluctance of suppliers to sell at lower margins besides healthy transactions at the spot market.
As per ChemAnalyst, “ the Cyclohexane market is going through turbulent dynamics in the Chinese domestic market. Whereas, the limited supply strengthened the downstream Caprolactam against the consistently rising prices for Crude Oil and Benzene. Therefore, it is anticipated that the prices of Cyclohexane will fluctuate at a higher level in the near term. “