Low Downstream Demand in Europe Causes Cyclohexane Prices to Drop

The price of Cyclohexane has been falling over the past several weeks as a result of a lack of demand from the European construction and paints & coatings industries.

Since the fourth quarter of 2022, the region has seen low demand for the Cyclohexane market due to the reduction in the construction and paints & coatings industries. The demand for Cyclohexane in the eurozone is declining, and these industries have not yet fully recovered. However, natural gas prices are also falling as a result of Europe's abundance of availability and high inventory. The orders from the end-use industries are declining week on week, and the inventory of the product from manufacturers have sufficient to meet the demand from the downstream industry. Additionally, the material delivery had no impact on the European supply chain. The German construction industry continued to decrease despite the continuous demand pressure imposed by rising interest rates and skyrocketing prices for other petrochemical products.

Interest rates were recently hiked by 50 basis points by the European Central Bank (ECB). Maintaining low-interest rates will eventually lead to a decline in inflation because they eliminate the possibility of an ongoing upward shift in inflation expectations and reduce demand.

The ChemAnalyst found that Cyclohexane cost around USD 1380/MT FOB Nuremberg, with a 0.7% weekly decline through the week ending on February 10, 2023.

According to the Analyst, prices for Cyclohexane are expected to decline in Europe until Q1 of 2023 due to the weak demand from the downstream industries. The experts anticipated that the cost of Cyclohexane would drop by 1% to 2% in February and 1.5% in March due to the European market's low buying trend. The construction industry is expected to improve at the end of quarter 1, and the demand may increase for the Cyclohexane market in Europe.