Rising Crude Oil Prices Accelerate the Market Fundamentals of Cyclohexanone Globally

Hamburg, Germany: The decision taken by OPEC+ members to cut the production of Crude Oil has inflicted the pricing dynamics of several petrochemicals, including Cyclohexanone, to remain buoyant across Asian and Western markets. The Middle Eastern nations, Saudi Arabia, Iraq, and several Gulf states are reducing oil supply by one million barrels per day, while Russia, another member of the OPEC+ group, is extending its reduction of 500,000 barrels per day until the end of the year. After Russia invaded Ukraine, oil prices rose to over $130 per barrel, but by March of this year, they had dropped to 15-month lows, barely reaching over $70.

In the German market, the prices of Cyclohexanone have demonstrated an increment of USD 25 per ton on 14th April compared to the costs observed in the first week of April 2023. Although, the inquiries from the downstream Adidpic Acid industries were not strong, and the price rise was mainly attributed to the Crude Oil concerns and the sustenance of the profit margins of the manufacturing firms. The inflationary pressures have started to decline on the back of easing energy costs, which has gradually started to revamp the deterred purchasing sentiments of end-use industries. The market players were optimistic that with the improvement in economic conditions across the European market, the demand from the chemical fibers and the solvent market would be bolstered.

On the other hand, The prices of Cyclohexanone have been fluctuating in a narrow range for the past two weeks in the Chinese market. The removal of China’s Zero Covid Policy has boosted trade activities of several feedstocks, including Cyclohexanone, with other nations as the cross-border flows from China have picked up and strengthened the market fundamentals of Cyclohexanone across the regional markets. Moreover, Cyclohexanone has witnessed a similar upward stable trend in the US market as financial sector worries have been limiting the high-price operations in the domestic region.

According to the pricing intelligence of ChemAnalyst, the prices of Cyclohexanone are likely to witness an upward trend in the forthcoming weeks. The rise in Crude Oil values will likely impact the production costs of Cyclohexanone, although the demand from the downstream Adipic Acid and other end-use industries is anticipated to be modest in the near term. In addition, The efforts made by central banks to control inflation would also be hampered by higher oil costs.