1. Caprolactam market prices peaked and retreated in 2025, concluding the year with an upward trend.

In 2025, caprolactam market prices peaked before retreating, concluding the year with an upward trend. Throughout the year, upward movements were infrequent, while downward trends persisted for extended periods, primarily from February to October. Although there were intermittent minor rebounds during this period, they were short-lived and limited in scope. The average annual price for caprolactam in East China in 2025 was RMB 9,263.51/ton, representing a year-on-year decline of 25.75%. The peak price occurred in late February at RMB 11,225/ton, while the trough was reached in late October at RMB 8,050/ton, with a price differential of RMB 3,150/ton. Detailed analysis follows:

First Decline Cycle (Late February to Early May): Prices rapidly retreated from the high of 11,225 RMB/ton, falling over 23%. This was primarily driven by uncertainty surrounding Sino-US trade negotiations, which dampened end-market confidence. Weak demand for PA6 chips constrained prices from the bottom up, compounded by sustained high industry operating rates (average capacity utilization exceeding 85% in the first half of the year), leading to oversupply.

Second Decline Cycle (Early August to Late October): Prices breached the 9,000 RMB/ton threshold, hitting a historic low of 8,050 RMB/ton. Drivers included: - Supply-side factors: New capacity from Guangxi Hengyi and resumed production from maintenance units increased market supply. - Demand-side factors: Sluggish end-market activity made PA6 chip shipments difficult. - Cost-side factors: Persistently falling pure benzene prices eroded cost support. Multiple bearish factors dominated the price decline.

Uptrend Phase (November–December, lasting 2 months):

The industry proactively implemented a “control new capacity, reduce existing capacity” strategy in response to the “15th Five-Year Plan” policy direction. Multiple enterprises cut production by 20%, improving the supply-demand balance. Supply tightening became the core driver of price increases, coupled with stabilizing and rising pure benzene costs, leading to coordinated price gains across the industry chain.

2. Caprolactam supply growth lags behind downstream PA6, tightening supply-demand balance

By 2025, total caprolactam capacity reached 8.18 million tons, up 960,000 tons from the previous year—a 13.30% increase. Limited new capacity additions during the year were offset by some enterprises utilizing government-approved capacity expansions, further boosting overall growth. New capacity additions in 2025 included: - Fujian Yongrong's technical upgrade expanding capacity by 50,000 tons; Guangxi Hengyi's new capacity of 600,000 tons; and the phasing out of facilities idle for over two years, such as Shijiazhuang Refining's 100,000 tons and Inner Mongolia Qinghua's 200,000 tons, totaling 300,000 tons, achieving capacity structure optimization. From 2021 to 2025, except for 2022, the annual industry capacity growth rate for caprolactam remained above 10%, reflecting strong expansion enthusiasm. Compared to the rapid expansion in capacity, the industry's total output at the enterprise level is projected to reach 6.85 million tons in 2025, representing a year-on-year increase of only 5.38%. This growth rate is significantly lower than the capacity expansion rate, primarily due to frequent planned and unplanned maintenance during the year, which prevented some capacity from being effectively utilized and constrained output growth.

Downstream caprolactam consumption in 2025 is projected to reach approximately 6.9504 million tons, representing a 10.68% increase over 2024—a growth rate exceeding that of production. Downstream PA6 capacity will expand substantially in 2025, reaching a total capacity of 8.708 million tons—an increase of 850,000 tons from 2024—directly driving an additional demand for caprolactam of nearly 1 million tons. Based on supply and demand data, while caprolactam production growth will lag behind downstream consumption growth, overall supply and demand will remain in a tight balance throughout the year.

3. Caprolactam plants will operate at minimal profit margins in 2025, with prolonged periods of annual losses

In 2025, the annual average profit margin for caprolactam plants will fall below CNY100 per ton, including by-product ammonium sulfate. The average price in 2025 will decline by over 25%, with shorter upward trends and longer downward cycles throughout the year. As prices retreat, the caprolactam industry will also slip into a loss-making situation. The industry's losses first emerged in March. Due to slower-than-expected demand recovery, plants averaged losses of ¥7/ton in March, with daily losses exceeding ¥300/ton at times. As profits shrank, caprolactam producers concentrated maintenance and reduced output from April to June, gradually lowering monthly operating rates to 78%-80%. Amid easing Sino-US trade tensions, industry profits staged a temporary recovery. However, as maintenance concluded in the second half of the year, operating rates gradually resumed. Coupled with the prevailing business logic of “full-capacity production to dilute unit costs and secure market share,” the industry entered a negative cycle of “supply glut → price decline → worsening losses.” From July to October, while operating rates recovered, industry losses widened. By October, the average loss per ton for industry facilities reached 491 yuan, with daily losses exceeding CNY 600 per ton at times. From November to December, caprolactam producers embarked on a path to break the deadlock. The industry proactively implemented a strategy of “controlling new capacity and reducing existing capacity.” Multiple enterprises cut production by 20%, thereby improving the supply-demand relationship. In December, the industry's operating rate dropped to the annual low of 71.8%, while plant profits turned from loss to profit.

From a cost perspective, caprolactam raw material costs saw a significant overall decline in 2025. The sharp drop in pure benzene prices became the primary factor weakening cost support, while coordinated declines in auxiliary materials further reinforced the downward trend. The rise in sulfur prices had a negligible impact on total costs, ushering the industry into a new cycle characterized by “high capacity, low costs, and weak profits.” In 2025, the average annual spot price of pure benzene in East China reached 5,317.78 RMB/ton, a 28.45% decrease from the 2024 average. As pure benzene accounts for over 60% of caprolactam raw material costs, its substantial decline significantly weakened its cost-supporting role for caprolactam. Among other auxiliary materials, synthetic ammonia and hydrogen peroxide prices both declined to varying degrees, with annual average price drops exceeding 10%. Only sulfur showed an upward trend in its annual average price. In 2025, the domestic sulfur market averaged 2,474.66 yuan/ton, a 126.65% increase over 2024. Most caprolactam producers procure sulfur to self-produce sulfuric acid, which constitutes a minor portion of caprolactam raw material costs.

Outlook for 2026: Capacity growth projected below 2%, with improving supply-demand dynamics

Supply-demand dynamics will be the key driver shaping market trends in 2026. Capabilities expansion for caprolactam will decelerate: New capacity additions in 2026 are projected at only 140,000 tons, primarily from technical upgrades and expansions by Yangquan Coal-Taiyuan Chemical and Cangzhou Xuyang. The expansion rate is expected to drop to 1.96%, indicating a significant slowdown in the pace of capacity growth as the industry enters a phase of low-speed expansion. Downstream PA6 demand pull: New PA6 capacity is projected at 765,000 tons, with a capacity growth rate of 8.79%. If commissioned as scheduled, this will translate into an additional 780,000 tons of caprolactam demand. Despite the PA6 industry maintaining low operating rates due to intensifying supply-demand imbalances, its demand for caprolactam continues to grow, potentially driving further improvement in the supply-demand relationship. This improving supply-demand landscape will lay the groundwork for caprolactam price recovery in 2026.

As an integrated internet platform providing benchmark prices, on January 13th, the benchmark price of caprolactam according to SunSirs.com was 9511.67 RMB/ton, a decrease of 0.52% compared to the beginning of the month (9561.67 RMB/ton).

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