SunSirs: The Focus of PA6 Spot Recovers and the Terminal Demand Returns in 2020

According to SunSirs, most plastic products develop well in 2020. But the development of PA6 market is not so obvious. As of December 23, the mainstream offer price of 2.75-2.85 of the sample enterprises was about 13,100 RMB/ ton, an increase of 3.42% compared with the average price level at the beginning of the year.

In fact, at the beginning of 2020, the domestic spot price of PA6 was on a good start, and caprolactam bottomed out and recovered after a big drop in upstream. The rise of raw materials led PA6 manufacturers to increase their prices generally. Due to the impact of the epidemic situation, PA6 production and sales nearly stagnated. Multiple factors affected market confidence, and the center of quotation fell rapidly, with a decline of 21.51% from the end of February to the beginning of April. Businessmen are pessimistic and slow in trading.

After three months of decline, the market began to pick up in early May. The main advantage of the market is still from the cost side, caprolactam supply into tight, prices rose sharply, the whole month in May rose as high as 16.21%. With the easing of the epidemic situation, the crude oil chemical market rebounded, and the pure benzene market was pushed up by the favorable crude oil and external market. However, the improvement of psychology of PA6 downstream buyers was limited.

The continuous lack of demand led to the gradual increase of PA6 inventory. In July, domestic PA6 inventory was running at a high level, and there was a risk of continuous inventory accumulation. At the same time, the raw material market fell, the overall market was weak. Affected by multiple negative effects, PA6 spot price continued to decline, Merchants actively ship, offered with reduced profit.

With the consumption of inventory, PA6 spot price guidelines began to appear after the National Day in October. The purchase and sales of home appliance enterprises and automobile enterprises increased significantly, and the operating rate of nylon textile enterprises continued to be high. The price of PA6 has risen by 25.56% so far. Meanwhile, caprolactam supply is tight at the end of the year, and the upstream and downstream are all in good together. Therefore, the spot price of PA6 is back to the level at the beginning of the year.

SunSirs analysts believe: China domestic PA6 market will fall more than rise in 2020. The lack of long-term demand in the domestic market leads to the lack of power for PA6 to rise. Throughout the year, the mismatch between last year's capacity increase and demand growth still has a far-reaching impact on this year. Although demand increased in the fourth quarter, it is difficult to say that the current market is balanced and healthy. Maybe it will take time for PA6 industry chain to adjust its allocation in China.

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