Price Trend

In August 2019, the domestic market for cyclohexanone first fell and then rose. According to the sample data monitored by business associations, the price of cyclohexanone was 8333 yuan/ton at the beginning of the month, 8133 yuan/ton at the end of the month, a drop of 2.40% in the month. Prices fell 34.13% over the same period last year.

II. Market Analysis

Products: In August, the market of cyclohexanone first fell and then rose. In the month, the export of Luxi and Haili cyclohexanone was unstable, the spot supply was not much, the demand of chemical fiber market was general, and the cyclohexanone fluctuated in the range of 500 yuan/ton. In the early ten days, due to the slight drop in pure benzene, the news of new production of Hengyi 200,000 tons cyclohexanone plant was released, the enthusiasm of chemical fiber procurement was general, the delivery of cyclohexanone was hindered, and the market price in East China was slightly reduced by 400 yuan/ton to 8250 yuan/ton. In the middle of the year, the good news of Sino-US trade was released, the pure benzene Market rose, and the cost side was well supported. Some Shandong factories were affected by the typhoon rainstorm. Nanjing Chemicals parked 100,000 tons of cyclohexanone plant. The spot supply was reduced. The market of cyclohexanone rose 450 yuan/ton to 870 yuan/ton, and cash was delivered. The demand of terminal market is weak, the profit margin of downstream caprolactam factories purchasing cyclohexanone is limited. Hengyin equipped with 200,000 tons of cyclohexanone plant reduces the demand for cyclohexanone compared with the earlier period. Solvent market needs to be purchased only recently, and the wait-and-see is strong.

Industry Chain: Raw Material: Pure Benzene: Pure Benzene fell first and then rose this month, the external market rose and domestic supply decreased to support price rebound. At the beginning of this month, commodities fell as a whole and pure benzene weakened under the pressure of negative macroeconomic news, such as unoptimistic expectations of Sino-US negotiations and depreciation of the RMB. The sharp drop in crude oil also led to the weakening of the outer plate of pure benzene. As a result, the price of pure benzene has continued to decline. Downstream users wait for Sinopec to cut prices, wait and see, market turnover is weak. At the beginning of this month, there were still sporadic transactions of 5000 yuan/ton, but then driven by the low-price supply in Shandong Province, the market buying gravity dropped to 4900-4950 yuan/ton. Sinopec lowered its listing price from 150 yuan/ton to 5100 yuan/ton on the 7th, less than expected, and the relatively high listing price supports the market focus. The unplanned parking of some large-scale installations reduced the spot supply in East China during the month, while the arbitrage window between the United States and South Korea remained open, the domestic import arrivals remained low, the overall market supply was tight, and the port inventory continued to drop to about 147,000 tons.

Caprolactam: In August, the domestic caprolactam liquids market was weaker and the price focus fell slightly. The caprolactam market began to weaken due to terminal demand dragging on from late July to early August. Sinopec’s listed price in August was lowered by 200 yuan/ton to 12600 yuan/ton. In addition, the downstream PA6 market was weak, the aggregate factory’s buying enthusiasm was not high, the confidence in the market was poor, and the price fell slightly to 1210-12200 yuan/ton. Later, due to the stopping of Haili, Taihua and Luxi chemical plant in Shandong Province, the northern supply decreased by 100-200 yuan/ton, but due to the lack of follow-up in the PA6 market, the spot price of caprolactam in East China returned to 12,100-12,200 yuan/ton at the end of the month, with less turnover of 12,300 yuan/ton and less fluctuation in the month as a whole. In terms of contracts, the settlement price of caprolactam in Sinopec in August was 1240 yuan/ton, down 200 yuan/ton from the settlement price in July. Sinopec’s listed caprolactam price in September was announced at RMB 1240 per ton, which was flat compared with the settlement price in August.

Industry: According to the price monitoring of business associations, in August 2019, there were 37 commodities rising annually in the chemical sector, of which 15 commodities increased by more than 5%, accounting for 17.9% of the monitored commodities in the sector; the first three commodities were hydrogen peroxide (39.93%), acetic acid (20.90%) and butadiene (14.47%). There are 39 kinds of products with a decline of more than 5%, accounting for 15.5% of the monitored products in this sector. The products with the first three declines are yellow phosphorus (-27.58%), epichlorohydrin (-23.28%) and sulfur (-19.38%). This month’s average rise and fall was 0.03%.

3. Future Market Forecast
Short-term cyclohexanone factory spot supply inventory reduction is expected, but the demand for chemical fibers is not optimistic, solvent market just needs to be purchased. Considering the cost-side pressures, Cyclohexanone analysts, a business association, expect the short-term market to be strong and upward, with a limited increase. In the long run, the supply of cyclohexanone is likely to increase in mid-late September, and cyclohexanone is weak in the long run.