For the Quarter Ending June 2021
Caprolactam supplies in the North American region improved during Q2 2021, as the Gulf coast industrial infrastructure recovered from the Impact of winter storm Uri and several manufacturing units ramped up the production rates. Despite that, several buyers were observed replenishing their raw material inventories ahead of the hurricane season. Global hike in the Benzene prices amidst raised inflation rate supported the upward trend in the US Caprolactam market. However, prices stabilized in the final month of the quarter with FOB Texas offers settling at USD 2470 per tonne by the end of the second quarter.
Overall, the Asian Caprolactam prices observed an uptrend since the start of the quarter, owing to abrupt inflation in the prices of the key feedstock Benzene which pushed up the pricing trend of derivative Caprolactam throughout the region. Demand from the downstream Nylon Chip producers plunged which further curtailed the offtakes of Caprolactam while the spot market in China observed strong wait and see sentiments among the buyers. Caprolactam supplies in the region were ample to easily manage the enquiries from the downstream textile and automotive industries. Pricing trend in the Chinese market traversed upwards trajectory since mid-of Q1 and observed a growth of 10.65% with FOB Ningbo settlements assessing at USD 2315 per tonne by the ending of second quarter.
Caprolactam Supplies in the European region were balanced at the starting of the quarter, however due to the consistent offtakes and global inflation in the feedstock Benzene curtailed the production margins. Demand outlook was positive in the European region with majority of enquiries coming from the automotive sector. Offtakes by the Nylon chip industries improved as downstream industries recovered from the impact of the pandemic. Imports from the USA increased but at a slower pace as domestic players focussed on replenishment of their inventories.
For the Quarter Ending March 2021
During the first quarter of 2021, supplies were constrained as several major plants declared force majeure, due to the extreme freeze weather conditions in the US gulf region led the shortage in upstream Benzene supplies. Due to the shutdown in the Gulf region the FOB Texas price surged by + USD 265/ton to USD 1950/ton. The demand is healthy as the consumption from the downstream automotive, construction and textile sector. Flaring Benzene rates further pushed up USA offers to unprecedented highs. The supply-demand widened gap surged the prices of CFR New York in March to USD 2250/ton.
The supplies in the Asia-Pacific region were tight, as several Capro production plants were shut, followed by decline in imports from Europe. The domestic supplies also remained short due to the Chinese Lunar New Year holidays starting mid-February. However, the demand remained firm from the downstream sectors, still there is constant consumption from the Nylon Yarns and chips. Low benzene inventory levels followed by firming upstream crude surged the spot prices of Caprolactam in the APAC market. Tight supplies from Russia pushed up the regional Caprolactam offers with prices touching USD 1444/ton in March.
Caprolactam supplies were balanced to tight, in the European region during Q1 2021, as LANXESS plant with the caprolactam production capacity of 220 KTPA was on a force majeure and restarted the production in the second half of the first quarter. The demand surged as consumption from the downstream food and packaging, electronics, textiles continued to be steady. Due to the less consumption from the automotive sector, buyers remained opportunistic to restock their inventories. The prices in Germany were raised by USD 510/ton taking the quarterly average to USD 2250/ton.
For the Quarter Ending September 2020
The Caprolactam supply in various Asian countries, majorly northeast Asia have declined in Q3 due to plant shutdowns and reduced run rates maintained to balance out the inventory levels. Producers were heard operating their manufacturing plants at curtailed rates, at around 75% in economies such as China & Taiwan. Also due to the reduction in demand from the downstream nylon markets-the major demand driving segment for Caprolactam, there was a consistent pressure over the profit margins of various Capro producers. Additionally, lesser international trade was observed following weaker demand in the region pressuring prices across the Indian subcontinent to around USD 1180 per tonne in September.
The Caprolactam supply in the region remained disturbed caused by disruptions in the producer’s plant operations in second and the third quarter as a combined of COVID-19 disruptions and outages caused by Hurricane Laura. Tightened supply and a sharp increase in demand for Nylon 6 fibers across the US and other regions to produce carpets, seat belts, ropes etc. kept the offers raised beyond expectations. Regional prices have shown an uptrend due to rise in the raw material Benzene which is tracing strong gains in the crude futures since the start August.
Demand for Caprolactam across the European countries revived in Q3 with better offtakes heard across the Nylon 6 consuming sectors compared to Q2. Sentiments took a leap with surge in DIY activities as people spent more on home renovations amid lockdown restrictions. Also, the market regained momentum buoyed by the sharp pick-up in the automotive industry with the demand still longing to reach to pre-COVID levels.