De-escalating Demand for Textile and Engineering Resins Market Debilitating the Prices of Polyamide 66 in China

The early price of Adipic Acid in China has gradually fallen during May, the trading seems not ideal, and the current weakness continues in the market. The cost-side support of Polyamide-6,6 is not good; the installation load of domestic Polyamide-6,6 enterprises is high, and the supply in the market is escalating. Regarding demand from the downstream textile and engineering plastics market, the current terminal enterprises tend to purchase for maintain their production levels. The resistance to high-priced supply remains relatively strong.

The impact of the Covid epidemic on East China has not yet ended, which tends the logistics in many places to be affected to varying degrees. The demand for some downstream factories in China has shrunk, the contradiction between supply and demand has become more serious, and the merchants have more excellent resistance to shipments. On-site transactions declined, and the sellers were in a bad mood and continued to lower prices for sales of Polyamide-66.

The price of upstream Crude oil fell sharply in China, and the focus of benzene negotiation became softer, weakening the price of benzene. The price of benzene in Shandong also fell. Saudi Arabia is planning to reduce their official Crude oil sale prices for Asia and Europe, which exacerbated concerns about the demand outlook; coupled with the continuous rising of the US dollar exchange rate due to inflation, the international oil price fell sharply.

China’s loosening grip on the world textile trade supports the downward trend. The country’s economy faces a shrinking job market and an aging population amid the COVID-19-induced slowdown as the Chinese currency Yuan weakens to 6.689 against the USD and loses its value in the international market. India’s consumer durables and electrical appliances market has been affected because the supply of components used in manufacturing goods ranging from television panels to refrigerators and washing machines is plunged in Shanghai attributed to the lockdown brought down by Covid situation there.

The president of the Consumer Electronics and Appliances Manufacturers Association (CEAMA) said it was difficult to predict the extent of the impact the lockdown in China would have on consumer goods, and parts of Beijing were also being shut down, which brought about disruption in the manufacturing plants.

As per Chem Analyst, there are many challenges in Shanghai, and short supplies across the textile and apparel market are surfacing; if the same lockdown continues in June, it may worsen the PA 66 and other Engineering Plastics markets in China. It could even take two to three months for the situation to normalize in China after the restrictions of Covid are lifted.