SunSirs: Cost Driven, China PA6 Market initially Suppressed and then Rose in December 2023

In December, the domestic PA6 market first fell and then rose, with most spot prices overall rising. According to data monitoring from SunSirs, as of December 31st, the domestic benchmark price of PA6 mixture was 14,675 RMB/ton, with a +1.47% increase or decrease compared to the average price level at the beginning of the month.

The market price of caprolactam also fell first and then rose in December. In the first half of the month, the price of raw material pure benzene was affected by the decline of international crude oil and followed suit. In the second half of the month, the price of pure benzene rebounded and rebounded, and the cost support for caprolactam was weak first and then strong. In addition, some production line equipment in the industry underwent temporary maintenance in the second half of the month, leading to a contraction in market supply. At the same time, there is a situation of expanding production downstream, and the procurement support is solid. Therefore, there is a significant improvement in on-site benefits, which increases the cost support for PA6.

In December, there was a narrow adjustment in the load of PA6 production enterprises, with an average operating rate of around 75% in the interval. The market supply has remained almost unchanged compared to the previous period, and there is ample supply of goods on the market. The inventory level is still not high, and there is no significant increase in supplier pressure, which still provides support for PA6 spot goods.

In terms of demand: Downstream, the load of the weaving and spinning industries has fluctuated slightly and remained stable, with an average load position of around 67% and 81%, respectively. The willingness of terminal enterprises to stock up is average, and their overall acceptance of high priced goods is not good. The operation leans towards buying on dips after market price drops, with trading concentrated near maintaining production demand, and overall support for the demand side of PA6 slices is average.

The PA6 market rebounded after a decline in December. The price of caprolactam first fell and then rose, and the cost support for PA6 gradually improved. The load of domestic polymerization plants fluctuated slightly, and inventory levels remained low. At the end of the year, the demand side activity was average, and market trading tended towards the low-end. It is expected that the PA6 market may fall upstream in the short term due to the return of caprolactam supply.

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