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SunSirs: 2019 PA6’s Yearly Report

January 03 2020 10:42:10     SunSirs (Daisy)

It can be seen that PA6 in 2019 suffers from double bearish news.

1. Price Trend (see 3-month spotprice)

According to the data from SunSirs, the overall PA6 market in 2019 has fallen, and the domestic spot price has shrunk to a certain extent. Up to December 30, the mainstream offer price of PA6 was around 12,666.67 RMB / ton, a decrease of 22.76% from the beginning of the year.

2. Market Analysis

Industrial Chain: On the upstream side of PA6, in the first half of 2019, the domestic caprolactam market showed an inverse V-shape trend. The supply and demand in the market were basically balanced, and the market price was stable.

After the first quarter of the year, downstream chip manufactures concentrated on start-up.  The lack of stocking of raw materials before the holiday and the relatively high purchasing atmosphere, coupled with the high overall start-up load, the market price continued to rise.

At the end of March, some caprolactam units were shut down for maintenance and supply was slightly tight. The market maintained its upward trend.

At the beginning of the second quarter, the previous period continued. But as downstream demand gradually weakened, the overall supply and demand returned to stability again. The market price peaked, and the industry returned to wait and see.

Affected by the macro-environment to May and June, the demand in the terminal market remained light. Although the operating load of upstream and downstream equipment in the field has fallen to a new low in recent years, the sluggish demand in the terminal market has continued to reduce the price of caprolactam.

In the third quarter, due to the sharp rise in raw material prices, caprolactam rose overall. The tight supply of the spot appeared. The double positives promoted the upward adjustment of the caprolactam market, and then entered a downturn in the fourth quarter.

The price of pure benzene in October began to fall, domestic product supply increased, and bearish sentiment increased. Caprolactam prices began to decline in October. Downstream procurement is prudent, terminal demand is insufficient, and market supply exceeds demand.

Product: The market price of PA6 entered the Spring Festival relatively smoothly at the beginning of the year.

After the holiday, the cost was firm and strong, and the price rose slightly.

At the end of the first quarter, the prices of some large manufacturers have increased. In terms of news, parking maintenance plans have increased. On the downstream side, weak demand is emerging and the market is deadlocked.

Up to April, demand is still not improving, but the price of upstream lactam liquid has continued to firm, and supply has continued to be tight. The raw materials hold the PA6 disk, which offsets the lack of downstream procurement.

By May, the operating rate of upstream caprolactam had risen, manufacturers' inventory was high, and prices began to decline. PA6 lost its strong support in terms of cost, the domestic PA6 industry's confidence was impacted, and manufacturers' offers were mostly lowered.

The following July and August PA6 followed the ups and downs of caprolactam.

After entering the traditional peak season of "Golden September and Silver October", increasing demand for downstream industries such as home appliances has injected PA6's long-lost positive benefits from itself and emerged from a wave of positive market trends. However, the domestic PA6 supply has an expanding trend, coupled with weak demand for half a year, which has led to the end of the traditional peak season. The response to the "Silver October" peak season was limited. Manufacturers failed to support the price, and their prices fell weakly.

At the end of the year, it entered the market to look at the upstream face. At present, PA6 is falling with raw materials. Looking at the 2019 PA6 market, the capsidity of caprolactam seems to have more reference significance.

The year-on-year PA6 spot price change is largely consistent with the upstream price, but this also reflects the fact that the PA6 market comes from the fact that the product itself is less favorable. Following the lag in the growth of demand and the increase in domestic production capacity, PA6 has also entered the queue of imbalance between supply and demand with other rubbers and plastic brother industries.

3. Market Forecasting

SunSirs analysts believe that the PA6 market in 2019 will fluctuate and fall. The trend of upstream caprolactam was not ideal throughout the year, and the price of PA6 was greatly affected by the fluctuation of upstream caprolactam.

However, PA6's own upward momentum is insufficient, and the downstream demand growth rate does not match the increase in production capacity. The mentality of the players is biased and cautious. Downstream replenishment is mainly needed throughout the year, and trading is average. The year-round PA6 market has a large upward resistance, and it is expected that there will be no improvement in the short term.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com

 

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