Slump in Caprolactam Prices Mirror Bearish Asian Cyclohexanone Market

The Asian Cyclohexanone market has been showcasing a downhill pricing trend since May. The primary factors influencing the upstream cyclohexanone market dynamics were the declining trend for downstream caprolactam and the closure of specific manufacturing units. China's lockdown restrictions owing to the Zero Covid policy have posed a grave threat to the Cyclohexanone price.

The downward trend of Caprolactam is due to its poor requirement from the downstream synthetic fibre sectors, which has resulted in the bearish demand for Cyclohexanone. In addition, the downstream Adipic acid trend is also fragile across the region because of decreasing demand, coupled with the copious availability of the product in the Asian market. When we cross-examined one of the producers, he stated that with declining buying sentiments from the downstream sectors, the production of Adipic acid was halted as the product availability was already abundant.

The lockdown restrictions owing to the resurgence of COVID cases in China ushered in the market shutdown, affecting the buying and selling sentiments. As a result, the demand for crude oil dropped in the Chinese market, further

The Asian Cyclohexanone market has been showcasing a downhill pricing trend since May. The primary factors influencing the upstream cyclohexanone market dynamics were the declining trend for downstream caprolactam and the closure of specific manufacturing units.China's lockdown restrictions owing to the Zero Covid policy have posed a grave threat to the Cyclohexanone price. affecting its derivatives. Also, the excess supply and low demand for the feedstock cyclohexane and benzene have been dragging down the Cyclohexanone market. However, the prices of Cyclohexanone were hovering around USD 1742/ tonne to USD 1757/ tonne towards the end of last week.

The accumulation of Caprolactam as a result of Japan's prohibition on its sale to South Korea has impacted Cyclohexanone supply and demand fundamentals. Furthermore, market sentiment in Japan's downstream chemical, pharmaceutical, and automobile sectors was negative. Additionally, the shutdown of Mitsubishi Chemical's cracker for maintenance turnaround has added fuel to the aforementioned situation and laid the foundation for the Cyclohexanone price drop.

As per the ChemAnalyst, "The Cyclohexanone price trend might increase in the coming week. The raw material prices are likely to rise, and the production activities may increase further. Besides, the downstream Caprolactam prices might gain strength along with the expected rise in supply and demand."