Throughout most of May 2025, Caprolactam prices in China and Germany faced prolonged downward pressure, largely fuelled by muted demand and high supply levels. Even though upstream cost pressures and seasonal restocking are expected to support prices at this time, they were more than compensated for by elevated inventory levels, weak downstream demand, and risk-averse market sentiment.

While some geopolitical events, like a brief de-escalation of U.S.-China tariffs, provided a silver lining, these events did not have any material effect on trade volumes or sentiment within the Caprolactam value chain.

In China, Caprolactam prices were still under pressure downward even as feedstock costs for benzene and cyclohexanone climbed. The continuous price softness was mainly due to an inventory overhang that depressed any raw material-driven gains. On the demand front, downstream nylon sector consumption was still weak, with producers running at lower rates due to weak order intake and finished goods inventories. Some downstream manufacturers either diverted production or suspended operations temporarily, further suppressing Caprolactam market activity.

While the just-arrived 90-day tariff relief arrangement between the U.S. and China indicated a possible return to improved trade relations, it did not revive momentum in the Caprolactam chain. Ongoing congestion at Chinese ports compounded delivery uncertainties, deterring foreign buyers from ordering new material because of possible delays and increased demurrage.

The German Caprolactam market also traced a similar subdued path. Prices softened earlier in the month under low buying pressures and oversupply. May, the otherwise dominant month for replenishment before summer slowdowns, witnessed conservative procurement as downstream sectors—especially automotive—faced prolonged production weakness.

Buyers held back, expecting further price adjustments owing to persisting oversupply and the anticipated arrival of cheaper Asian-origin material. Sellers responded with price concessions on spot volumes in attempting to clear stocks. Furthermore, supply chain inefficiencies caused by European port congestion have disrupted delivery schedules, discouraging importers from entering new transactions. Towards the end of the month, Caprolactam prices slightly stabilized as sellers defied further discounts and inventory pressure moderately relaxed.

Looking forward, Caprolactam markets in both China and Germany are likely to remain cautious in tone. In China, any possible upside would depend on significant upticks in downstream nylon demand and improvements in clearing port backlogs to rebuild export confidence. While there have been some indications of stabilization in Caprolactam prices in Germany, the overall picture continues to be obscured by substandard end-user demand, particularly in the automotive industry, and ongoing logistical disruptions.