The Indian Caprolactam Market is Under Pressure, Causing Shrinkage of Demand
The Indian Caprolactam Market is Under Pressure, Causing Shrinkage of Demand

The Indian Caprolactam Market is Under Pressure, Causing Shrinkage of Demand

  • 22-Aug-2022 2:13 PM
  • Journalist: Jai Sen

The upstream feedstock benzene price has declined to result in poor demand from the downstream Nylon market, making discussions of Caprolactam lukewarm. Generally, participants are also slow in their buying trade from the downstream textile market. The feedstock  Cyclohexanone market has inadequate supply and demand, necessitating significant downstream surveillance. The primary causes of the price reduction in pure Benzene were the collapse of cost support and macro pessimism brought on by the severe decline in crude oil. These upstream feedstocks impacted the prices of Caprolactam in the Indian market. Companies that produce cyclohexanone are now losing money, there is a short supply, and downstream demand has not changed much.

The prices of Caprolactam in the Indian market are under cost pressure because of the downturn in downstream demand for Nylon-6. Declining freight rates also support the downward trend. The price of Caprolactam was seen to be swinging about INR 260500/tonne ex-Mumbai, with a weekly decrease of 1.1%, according to data from the Chem Analyst pricing team.

This week, the market price of Caprolactam kept declining. In India, the price of the raw material Benzene dropped, and the support for the cost of Caprolactam was insufficient. Because there was little demand in the market, the downstream only made a tiny number of demand purchases. After filling the space, the downstream delivery speed drastically slowed down at the end of the month. The fight over expensive pure Benzene, the recession, and the decline in demand for pure Benzene all grew together with many downstream losses.

This week, the cost-side support of PA6 continued to deteriorate as the upstream Caprolactam market trend continued to drop. The PA6 supply side is robust, and aggregation businesses make money. Additionally, due to the recent load drop of downstream companies and the initial inventory backlog of end-user industries, the downstream enterprises are now essentially taking modest bills of materials and making careful purchases to meet production demand.

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