1、 Price trend
As of September 30th, the average price of industrial grade high-quality cyclohexane in China was 6833 yuan/ton, which was at a mid to low level in September (6167-8000 yuan/ton in the one-year range, with a median of 7083 yuan/ton). The end of month price of 6833 yuan/ton still has about 1167 yuan/ton space from the high level in the year, with a certain degree of upward elasticity but constrained by downstream demand.
2、 Market analysis
Upstream costs: The direct raw material is pure benzene, with an average price of 9545 yuan/ton (9/28) for pure benzene in East China, up 20.77% from the previous month. Sinopec’s listed price increased by 300 yuan to 10200 yuan/ton on 9/29, and spot prices at Jiangsu ports surged to 11000 yuan/ton at one point. The driving force was the obstruction of navigation in the Strait of Hormuz and the US Iran conflict, which pushed up oil prices. The inventory of pure benzene at Jiangsu ports dropped to a low of about 36000 tons. Coupled with pre holiday stocking, pure benzene “separated from crude oil and maintained a high level”
Supply side: The overall operating rate of domestic cyclohexane plants is 62-66%, which is at a medium to low level. Upstream pure benzene: 71.8% of petroleum benzene and 56.24% of hydrogenated benzene started operating on 9/24 (month on month -3.18pct), with a weekly production of 506500 tons of pure benzene. The overall supply of raw materials has recovered, but hydrogenated benzene has been constrained by losses and tight crude benzene, leading to a decline in operating rates. The market is experiencing “tight supply and limited circulation”, which has become an important support for the price increase on 9/28.
Downstream demand: Downstream support: high prices, but weak demand and limited transmission. Cyclohexanone (main intermediate): 10500-10600 yuan/ton in East China,+53.62% year-on-year, fluctuating at a high level. Caprolactam (nylon 6): 14145 yuan/ton,+62.71% year-on-year, operating at a high level; BASF has once again raised the price of caprolactam/PA6 in North America since September. Adipic acid (nylon 66) was about 8500 yuan/ton at the end of August, a month on month increase of 1.49%, driven by pure benzene.
3、 Future forecast
Analysts believe that cyclohexane is currently experiencing a strong oscillation between strong cost support (high levels of pure benzene) and weak demand (low downstream production), with room for replenishment in the mid to low levels. Looking at the outlook for pure benzene/oil prices, it is expected to fluctuate within the range of 6500-8000 yuan/ton in the fourth quarter.