Raw materials are rising again, downstream transmission is rising, and commodity supply is low.
“With the advent of the ‘Golden Nine and Silver Ten’, the upstream and downstream sectors of the cyclohexanone industry chain have started to rise, but the cyclohexanone market is still stable with little movement. The reason is that the proportion of self-produced cyclohexanone enterprises has gradually increased. Export sales and circulation have shrunk.”Driven by the upstream and downstream sectors, the cyclohexanone market began to moderately consolidate, with a weekly increase of 1.5%.
Raw materials rise again from high level
Affected by the decline in domestic pure benzene stocks and downstream pre-holiday stockpiles, the pure benzene market ushered in a rapid rise in September, with an increase of more than 7% in the first week. This made cyclohexanone, which was already on the edge of the cost line, Directly into a state of loss.
Cyclohexanone production companies can only adjust their business strategies and reduce external sales. Most companies implement self-production for their own use.
“Fortunately, the downstream industry is in the peak season of the ‘Golden Nine and Silver Ten’ period, and cyclohexanone companies have taken the lead in passively following the price increase from supporting caprolactam products to balance and digest part of the production costs.
The export market of cyclohexanone is waiting for opportunities to adjust the ratio between self-use and export. “
It is expected that based on the current domestic and foreign market conditions and the fact that mainstream downstream products such as styrene, phenol, aniline, caprolactam, etc. can basically absorb the increase in raw materials normally, the pure benzene market will remain at a high level for some time.
The high cost status of downstream will not improve in the short term. It is more likely that the proportion of cyclohexanone exported will continue to decline in the future, and it may become a future development trend as an intermediate product produced by enterprises for their own use.
Downstream conduction rises
Judging from the increase in products in the upstream and downstream industrial chain of cyclohexanone, the upstream raw material pure benzene currently has the largest increase. Due to limited sales volume, the cyclohexanone pure commodity market cannot effectively digest the increase in raw materials in a short period of time. During the same period, caprolactam, a direct downstream product of cyclohexanone, had the fastest and largest increase, and the closer to the end of the industrial chain, the slower this transmission. However, the linkage effect of the industrial chain has been driven, which is expected to be beneficial to the market outlook of cyclohexanone. It is expected that the cost transmission process of downstream products will continue. Due to the increase in self-use of cyclohexanone, the market circulation has decreased, which will inevitably lead to further recovery in demand.
Product supply is low
In recent years, in order to reduce costs, cyclohexanone manufacturers have become a trend to extend and strengthen the product chain. At present, most domestic cyclohexanone production enterprises have self-supported downstream equipment. When the market is not good, cyclohexanone is produced for self-use. When the external market is strong, cyclohexanone is appropriately exported to meet the flexibility of operations.
Therefore, when the volume of exported products gradually decreases, the price say in the cyclohexanone market is gradually lost, and the pricing power is in the hands of several large domestic companies with self-supporting equipment.
If caprolactam and its downstream industrial chain products can successfully absorb the increase in raw materials, the cyclohexanone market will mainly be moderately consolidated, and a sharp increase is unlikely;
If the downstream transmission is not smooth, the possibility of cyclohexanone companies implementing production restrictions and price increases cannot be ruled out.
Data statistics show that as of early September, the operating rates of domestic pure benzene (petroleum benzene) and caprolactam were 80% and 76% respectively, and cyclohexanone was 66%. “It can be seen from the upstream and downstream operating rates that are greater than the operating rate of the cyclohexanone unit. Except for the company’s own production and use, the pure market sales of cyclohexanone have not grown significantly, and its market outlook is still closely related to the trends of many downstream products of caprolactam.
Post time: Sep-26-2023