German Cyclohexane Prices Slide Amid Economic Uncertainty in August 2023
- 29-Aug-2023 12:45 PM
- Journalist: Timothy Greene
During August 2023, the price of Cyclohexane in the German market maintained a stable to weak trend, primarily attributed to the subdued demand originating from the downstream coating and solvent industries. Notably, during the past week, sectors such as downstream textile, construction, and allied industries displayed minimal movement, signifying a persistent lack of momentum in the consumption of Cyclohexane within these segments.
In August, the latest survey indicated that German business activity faced its most significant decline over three years. This decline was marked by a pronounced contraction in manufacturing output and a renewed downturn in services activity. Businesses maintained a pessimistic outlook, primarily influenced by factors such as rising interest rates, customer uncertainty, and elevated inflation, which continued to exert pressure on the demand for goods and services.
Consistently observed since May, the most recent survey data demonstrated a reduction in the overall influx of new business across the private sector in August. This Cyclohexane price decline was primarily driven by a substantial drop in manufacturing new orders, as a combination of customer destocking and hesitancy in investment contributed to the sharpest decrease in demand for Cyclohexane. Additionally, the service sector experienced a swifter decline in new business, marking the fastest pace since November of the prior year. The manufacturing PMI of Germany is slightly up in August compared to July but below the threshold limit. This rise in PMI was driven primarily by its supplier delivery times and stocks of purchased components.
In August, there was a continued and widespread decrease in backlogs of Cyclohexane work, indicating a shortfall in incoming new orders to replace finished projects. Moreover, the decline in total outstanding business accelerated for the fifth consecutive month, reaching its fastest rate in over three years. Cyclohexane manufacturers experienced a notable decline in work-in-hand, impacting their willingness to hire new staff and slightly reducing factory workforce numbers. In contrast, job creation in the service sector virtually reached a standstill, resulting in overall employment remaining relatively unchanged for the month.
The price of Cyclohexane was hovered around USD 1320/MT on a FOB Nuremberg basis during the week ending 25th August 2023.
Anticipated stability characterizes the potential price trajectory of Cyclohexane within the Eurozone, owing to prevailing economic uncertainties. The demand for Cyclohexane is projected to remain stagnant, as manufacturers have experienced a lack of new orders during August. Additionally, the ascent of interest rates has contributed to a dampened demand for Cyclohexane across downstream sectors, manifesting a scenario of subdued activity in the middle of the third quarter.