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Raw Material Is Strong, Downstream Is Weak, Caprolactam Profits Decline Sharply.

2019/9/2 14:17:00 0

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Since May 2019, the price of pure benzene has continued to rise, while the price of caprolactam has dropped. Caprolactam profits have experienced a cliff style decline, ending the high profit situation in the past two years since the second half of 2017.

Table 12019 average price of pure benzene in East China market

Unit: yuan / ton

time	Monthly average price	Ups and downs	Ups and downs
2019-01	Four thousand six hundred and seventy-eight	-373.72	-7.40%
2019-02	Four thousand nine hundred and eight	Two hundred and thirty point zero six	4.92%
2019-03	Four thousand six hundred and ninety-seven	-211.57	-4.31%
2019-04	Four thousand four hundred and twenty-five	-272.12	-5.79%
2019-05	Four thousand four hundred and eighty-seven	Sixty-two point five nine	1.41%
2019-06	Four thousand seven hundred and twenty-one	Two hundred and thirty-three point nine one	5.21%
2019-07	Five thousand two hundred and sixty	Five hundred and thirty-eight point nine five	11.42%
2019-08	Five thousand one hundred and ninety-nine	-60.91	-1.16%

Source: lung Chung

From 2019 to April, the average price of pure benzene in the East China market statistics showed that the price of pure benzene rose all the way from the low point of 4425 yuan / ton in April, and the average monthly price in April in the East China market closed at 5199 yuan / ton, up 775 yuan / ton compared with April, or up to 17.51%. At present, Sinopec's pure benzene listing price is 5450 yuan / ton, pure benzene is still in the upward trend.

Table 22019 caprolactam East China market average monthly price

Unit: yuan / ton

time	Monthly average price	Ups and downs	Ups and downs
2019-01	Twelve thousand six hundred and ninety-eight	-340.4	-2.61%
2019-02	Thirteen thousand four hundred and fourteen	Seven hundred and sixteen point five six	5.64%
2019-03	Thirteen thousand nine hundred and thirty-eight	Five hundred and twenty-three point eight one	3.90%
2019-04	Fourteen thousand two hundred and eighty-six	Three hundred and forty-seven point six one	2.49%
2019-05	Twelve thousand nine hundred and fifty-eight	-1328	-9.29%
2019-06	Eleven thousand eight hundred and eighteen	-1140	-8.79%
2019-07	Twelve thousand four hundred and twenty-four	Six hundred and five point four nine	5.12%
2019-08	Twelve thousand and two hundred	-223.9	-1.80%

Source: lung Chung

And the strong trend is different from the pure benzene market. Two thousand and nineteen year Five Since the month, the demand for nylon industry has been weak due to the slow economic growth and the escalation of trade frictions. The price of caprolactam has dropped sharply. Eight Monthly caprolactam monthly average price closed at Twelve thousand and two hundred element / Tons, more Four Month highs fell Two thousand and eighty-six element / Tons or decrease 14.6% 。 Five After the month, the trend of caprolactam is opposite to that of pure benzene. Caprolactam profit presents a cliff like slide.

chart 12019 Caprolactam profit chart

Source: lung Chung

Five Since the month, caprolactam profits have been Three thousand Multiple high cliff cliffs fell to Eight Caprolactam profit narrowed to the end of the month. One hundred and fifty element / Tons (processing cost) Six thousand element / Tons, excluding ammonium sulfate subsidies.

At present, the pure benzene market is still strong, and the US Korea arbitrage window is open to support the price of pure benzene outside the market, coupled with the tight domestic supply and the devaluation of the RMB, the late benzene market still has strong expectations.

The caprolactam market is constrained by its own supply and demand, and its optimism is limited. Though this year PA6 The new capacity has supported the caprolactam demand to some extent, but this is precisely because of this year. PA6 Aggregate new capacity is too much, coupled with trade friction and economic situation affecting weak demand performance, resulting in weak demand. PA6 The slicing capacity is too serious, and the utilization rate of polymerization capacity is low. 5-6 Cheng. And the competition in the slicing link is fierce. Some factories run a capital loss or loss, resulting in the cost reduction of the polymerization plant and the narrowing of the profit of caprolactam.

The profitability of caprolactam in the late stage includes whether the polymerization can be profitable. Ultimately, it depends on whether the supply and demand can be substantially improved. In the light of the current situation, trade frictions are becoming more and more intense. Tariffs on imported products in China and the United States continue to rise. The terminal textile industry is experiencing "cold winter". Although there are some news reports on the improvement of some gray fabrics and printing orders in the near future, on the one hand, because of the large volume of polyester fabrics, the demand for short-term improvement is mainly polyester. On the other hand, the social stocks in the downstream sectors are generally high, and the downstream is also mainly based on inventory, which is reflected from the terminal. PA6 The advantages of slicing and caprolactam are still few.

On the whole, the supply and demand of caprolactam can only maintain a weak balance, and the polymerization link lacks power to boost load in the short term. The weak demand of the terminal is also difficult to produce explosive growth, and the cost end is hard to drop at a time. Therefore, the caprolactam market will continue the game of cost and supply and demand in the late stage, and maintain the small profit operation.