US Caprolactam Market Faces Challenges with Moderate Supply and Low Demand
US Caprolactam Market Faces Challenges with Moderate Supply and Low Demand

US Caprolactam Market Faces Challenges with Moderate Supply and Low Demand

  • 29-Apr-2024 2:17 PM
  • Journalist: Robert Hume

The US Caprolactam market experienced a marginal increase in April, with raw material benzene prices remaining steady, providing limited support to the downstream Caprolactam sector. Despite this, the overall market conditions remain challenging, with supply levels categorized as moderate and demand staying relatively low. As a ripple effect, the cost of Caprolactam in the US market rose by approximately 1% in April compared to the preceding month's data.

One of the key factors contributing to the market's stability has been the steady prices of benzene, a crucial raw material in Caprolactam production. The steady benzene prices have helped to keep production costs in check for Caprolactam manufacturers, preventing any significant upward pressure on prices.

However, despite the modest cost environment, new orders for Caprolactam have declined in the US market this month. Manufacturers have reported a drawdown of their stock of purchases in April, indicating a cautious approach to inventory management amidst uncertain market conditions. This decline in new orders reflects the subdued demand for Caprolactam in the US, which has been a persistent trend in recent months.

Another notable development in the US market is the shortening of suppliers' delivery times for the third consecutive month. This improvement in delivery times suggests a more efficient supply chain, which could help to alleviate some of the pressure on manufacturers. The shorter delivery times may also be a result of the lower demand for Caprolactam, allowing suppliers to fulfill orders more quickly.

Despite challenges in the domestic market, the US Caprolactam industry has shown resilience with stable international demand. While domestic sales have been slightly weaker, new export orders have remained unchanged for the second consecutive month, indicating a more positive trend in international markets.

Furthermore, there has been a decrease in staffing levels in the US manufacturing sector, partly due to signs that current capacity is sufficient to handle workloads. This reduction in staffing levels is also reflected in the decreasing backlogs of work, which have been declining for the third month in a row. This trend indicates that manufacturers can manage their production efficiently, without the need for excess capacity.

Overall, market conditions remain challenging, with moderate supply levels and low demand. The cost of Caprolactam rose slightly, but stable benzene prices helped to mitigate significant price increases. The coming months will be crucial for the Caprolactam sector in the US, as it navigates through these challenging market conditions.

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