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SunSirs: July PA6 Demand Is Weak, The Cost Side Falls Back, PA6 Drops Accordingly

August 05 2020 09:44:03     SunSirs (Joyce)

Price Trend



According to the data by SunSirs Bulk Commodity Pricing, July China PA6 market condition declines with weakness, and for most grades, the spot adjusts lower apparently. As of July 31, in terms of Medium viscosity, traders’ mainstream offer price is about10,933.33 RMB/ton, which has a 10.38% decline than early this month.

Factor Analysis



As PA6 upstream, in July caprolactam market is mainly negative, slumping sharply. According to the data by SunSirs Bulk Commodity Pricing, July caprolactam price drops greatly. On July 1, caprolactam’s ex-factory price is 10,400 RMB/ton, and July 30 price is 9,533 RMB/ton, which declines 8.01%. The highest price within this month is 10,400 RMB/ton, while the lowest is 9,533 RMB/ton. During it, because of the continual falling, early July the cost support wanes. In addition, the supply is sufficient, but the downstream demand is lacking, so the whole market is feeble. Late this month, although the ingredients are climbing incessantly, the downstream demand remains weak, so on general the support for burden promotes limitedly. SunSirs caprolactam analyst supposes that recently the ingredient pure benzene is climbing, so the support from cost side is strongly positive, and the space for dropping is limited. However, the downstream behaviors are not seen a better trend, so in a short time it will maintain supporting the burden. It can be estimated that August caprolactam will climb steadily after a weak correction.

PA6 condition is generally supported by its upstream caprolactam in June, so it proceeds in a high level firmly after increasing. Early July, PA6 follows the negative trend of upstream caprolactam, so the beginning of July is the highest point at 12,200 RMB/ton. After that, the traders deliver the goods actively, surrendering profits to clear the warehouses. However, the improvement of downstream following-up orders is limited, so the strategic is mainly in a way of replenishing on low and taking with using, and the tactic is inclined to small-scaled purchase. The traders’ state of emotion is poor, retaining the operation of reducing the inventory, so the transaction atmosphere is plain.

Market Outlook

SunSirs analyst deems that July China PA6 is dropping negatively, and some grades’ spot declines obviously. The upstream caprolactam’s rebounding trend is apparent, so its support for PA6 cost side is waning. The downstream demand from slicing mills is feeble, whose major tactic is purchasing at a low price. The transaction of PA6 is improved finitely, so the traders are generally thinking negatively of the after-market, and their operation is still sacrificing the profits to reduce the inventory. It’s predicted that recently PA6 market will continue the weak trend.

 

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