Global Caprolactam Prices Drop in January Due to Low Demand

In the USA and Europe, the price of Caprolactam fell in January 2023. The Caprolactam market was impacted by several factors, which contributed to the low demand from these regions.

Due to weak demand from downstream Polyamide 6 and inflation in the Eurozone, the Caprolactam market in Europe decreased by 3.6% in January. There were no energy shortages or disruptions to industrial activities in the Eurozone due to the substantial storage of natural gas. Meanwhile, the weak-cost pressure from feedstock Cyclohexanone further supported the commodities, including the Caprolactam market. The Cyclohexanone price dropped by 5.7% on an FD Hamburg basis during January 2023. Inflation is expected to ease slowly due to falling energy costs and weakening demand, but it will soon remain above the targets set by the central bank. According to market experts, annual inflation in the European region rose 8.5% in January 2023, down from 9.2% in December 2022. On a FOB Hamburg basis, Caprolactam costs approximately USD 3300 per MT during the week ending February 3, 2023.

In the USA, the Caprolactam prices dropped in January by 3% due to weak demand from the Polyamide sectors, and the feedstock Cyclohexanone dropped by 6.4%. The manufacturers reported orders from the end-use industries declined in January and gloomy customer demand in the market. Customers' hesitation to spend results from high-interest rates and inflation, which continue to depress the market. Last week, the US Fed raised interest rates to control the inflation rates in the country. Recently BASF declared force majeure on the production of Caprolactam at its USA facilities due to severe winter weather and the icy temperature hits in Texas. During the week that ended on February 3, 2023, the price of Caprolactam on a FOB Texas basis hovered around USD 2460 per MT.

According to ChemAnalyst, the Caprolactam market is expected to decline slightly in February owing to moderate inflation and weak market sentiments. Declining natural gas prices and lowering demand from the downstream industries will decrease the cost of Caprolactam in the regions.