Cyclohexane Prices Stabilize Entering May 2024 as Cost Support from Benzene Wanes
Cyclohexane Prices Stabilize Entering May 2024 as Cost Support from Benzene Wanes

Cyclohexane Prices Stabilize Entering May 2024 as Cost Support from Benzene Wanes

  • 06-May-2024 5:52 PM
  • Journalist: Peter Schmidt

The beginning of May 2024 leads prices of Cyclohexane to stabilize across the European and Asian markets. Previously, prices of Cyclohexane were recorded to have witnessed an increment of approximately 4% across Europe and 10% across Asia during the month of April 2024.

The continued increments in the prices of Cyclohexane were attributed to the inflation in the prices of feedstock Benzene and upstream Naphtha observed during March 2024, which were recorded to have inflated by approximately 12% and 8% respectively during this timeframe, leading to heightened costs to manufacture Cyclohexane.  Moreover, several plants across China were put on maintenance turnarounds during the early weeks of April 2024, for example, Zhejiang Petroleum & Chemical Co Ltd. The most prominent being the plant owned by SINOPEC in Shanghai, Shandong, and Beijing which had reduced operations for 12, 7, and 9 days, respectively, and operating at an average rate of 60%. Which caused a situation of shortage for Benzene during this timeframe, consequently prompting the prices of Cyclohexane to rise.

However, later, the stabilization in the prices of Cyclohexane is attributed to the loss of cost support from the production side. During April 2024, prices of feedstock Benzene were reported to have witnessed weekly declines of approximately 12% thus easing production costs. Demand for Cyclohexane from the downstream paints and coating industries however remained uncertain as the performance of the construction sector varied across Europe and Asia.

Across Germany, the construction sector exhibited signs of improvement as evidenced by increments in house prices. Existing house prices also gained 0.8%, and prices for new houses increased 3.1%. The signs of stabilization follow official German government data (Statistics Bundesamt) that showed residential property prices dropping 8.4% in 2023 from a year earlier. The stabilization in the construction sector is further evidenced by increments in the residential and nonresidential permits which increased from 16,800 units to 18,200 units from February 2024 to March 2024, with further anticipations in April 2024 despite official figures not being published, according to Statistics Bundesamt.

Across China, despite the seasonally adjusted construction PMI witnessing a marginal improvement from 56.2 in March 2024 to 56.3 in April 2024, the current scenario presents a largely depressing outlook. This is largely indicated by residential investment witnessing a depreciation of approximately 11%. Furthermore, there was an 11.1% decline in the construction area of real estate development firms from the previous year to 678.51 million square meters. Among these, the area devoted to residential buildings was 47.45.8 million square meters witnessed a decline of 11.7%. As a result, the demand for Cyclohexane from downstream remained largely subdued.

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