For the Quarter Ending September 2024
North America
The third quarter of 2024 has witnessed a significant uptrend in Caprolactam pricing across North America, with the USA experiencing the most notable price changes compared to the previous quarter. This increase can be attributed to several key factors. The current demand of caprolactam in the downstream industries is low driven by fluctuations in the automobile industry and a decline in textile industry. However, recent hurricanes have resulted in significant supply chain disruption, leading to tighter supply conditions, further driving up prices.
In the USA specifically, the correlation between price changes and seasonality has been evident, with prices showing an approximately 5% increase from the previous quarter. Despite the increase in price, Industries faced challenges from hurricanes, which disrupted the supply chain, while weak orders from the overseas market also contributed to price volatility. The port of Brownsville near the Mexico border and other smaller terminals in Texas were closed, while major ports such as Houston, Galveston, Corpus Christi, Texas City, and Freeport operated with restrictions.
As of the end of the quarter, Caprolactam prices reached USD 1895/MT, FOB Texas. This figure highlights the ongoing impact of both localized disruptions and broader market dynamics on pricing trends in the Caprolactam sector.
APAC
In Q3 2024, the APAC region experienced a steady decline in Caprolactam prices, primarily due to weak orders from downstream sectors like textiles and automotive industries. Seasonal factors and reduced consumer spending contributed to lower demand, resulting in subdued buying activity. China, in particular, faced significant price fluctuations, influenced by oversupply, diminished demand, and falling prices of raw materials such as pure benzene. The global textile industry is increasingly moving away from synthetic fibres amid rising environmental concerns, which has further exacerbated the oversupply situation. This shift reflects a broader negative sentiment in the market. During Q3 2024, Caprolactam prices in the region dropped sharply by 6.14% from the previous quarter, underscoring the continuous downward trend. By the end of the quarter, prices in China had fallen to 1765/MT, FOB Shanghai, highlighting the challenging pricing environment affecting the region. The combination of weak demand, shifting industry practices, and oversupply has created a challenging landscape for Caprolactam pricing in the APAC market.
Europe
In Q3 2024, Caprolactam prices in the European region experienced a significant decline, primarily driven by weak demand from downstream industries. Key factors contributing to this downward trend include a slowdown in the automotive and textile sectors, reduced manufacturing activity, and sluggish new orders. The automotive industry is facing major challenges, such as a decline in new registrations and intensified competition from Chinese electric vehicle manufacturers, which has diminished the need for Caprolactam in automotive components. Additionally, the market is grappling with increased shipping costs, logistical disruptions, and uncertainties in deliveries. The German textile industry, in particular, is experiencing decreased demand as consumers shift toward more sustainable practices, negatively impacting Caprolactam sales. By the end of the quarter, the price for Caprolactam at FOB Hamburg in Germany reached USD 2148/MT, reflecting the prevailing negative sentiment in the pricing environment. Overall, Q3 2024 was characterized by a negative pricing trend, with subdued demand and challenging supply dynamics significantly impacting market stability across the region.
MEA
Throughout Q3 2024, the Caprolactam market in the MEA region experienced a notable decline in prices due to several significant factors. An oversupply of Caprolactam from overseas markets weakened demand, leading to reduced pricing across the region. Additionally, consistently low orders from downstream sectors, particularly in the textile and automotive industries, further applied downward pressure on prices. A stable supply chain and ample availability of raw materials also contributed to the negative pricing trend. Moreover, the absence of cost pressure from feedstock Benzene in the Asian market played a crucial role in this decline. In the United Arab Emirates, the market recorded the most significant price changes during the quarter, with a negative percentage change of 9.5 % from the previous quarter. By the end of Q3 2024, the price for Caprolactam at CFR Jebel Ali in the UAE reached USD 1,880/MT, underscoring the prevailing negative sentiment in the pricing environment. Overall, the quarter was characterized by a sustained decline, reflecting broader market challenges.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Caprolactam market experienced a stable to moderate trend despite a weak downstream demand, particularly from the textile and automotive sectors. Amid high inventory levels and cautious procurement practices, manufacturers faced diminished orders, resulting in persistent price reductions. The global textile market's lackluster performance, exacerbated by geopolitical tensions and elevated interest rates, further dampened Caprolactam demand. Constrained logistics, including limited vessel space and heightened freight charges, curtailed overseas demand, adding to price pressures.
Focusing on the USA, which exhibited the most substantial price shifts, the market showed clear signs of declining sentiment. Seasonal impacts and subdued consumption trends marked Q2, correlating directly with Caprolactam's price trajectory. Compared to the same quarter last year, prices plunged by 22%, reflecting a sharp market contraction. Despite a marginal 2% uptick from the previous quarter, likely due to temporary restocking or speculative buying, the overall quarter depicted a negative pricing environment. The transition from the first to the second half of Q2 saw a 1% price reduction, underscoring the persistent downward pressure.
APAC
The second quarter of 2024 has been marked by a significant downward trend in Caprolactam prices across the APAC Region. This decline is primarily attributable to persistently weak demand from downstream industries, including the textile and automotive sectors, coupled with ample supply and stable feedstock benzene prices. Furthermore, geopolitical tensions and subdued export activities have exacerbated the sluggish market conditions.
In South Korea, where the price changes have been most pronounced, the overall trend has been notably bearish. The market dynamics have been heavily influenced by seasonality factors, such as lower purchasing activity during the holiday periods and a cautious approach from downstream industries in replenishing inventories. The percentage change from the same quarter last year recorded a sharp decline of 12%, highlighting the weakened state of demand. Additionally, there was a modest 1% decrease from the previous quarter of 2024, further emphasizing the continued pressure on prices.
Comparing the first and second halves of the quarter, there was a marked difference of -5%, indicating a consistent downward trajectory. The quarter concluded with the price of Caprolactam standing at USD 2099/MT FOB Busan. Overall, the pricing environment has been distinctly negative, reflecting the ongoing challenges faced by the industry in combating oversupply and diminished demand.
Europe
The second quarter of 2024 has witnessed stable pricing for Caprolactam across the European region. This stability in the market can be primarily attributed to a delicate balance between supply and demand. Despite moderate operational capacities and sufficient inventory levels, the demand from downstream sectors, particularly textiles and automotive, remained tepid. High-interest rates and geopolitical tensions have cultivated a cautious purchasing behaviour, resulting in subdued market activity. The persistent hesitancy among consumers and businesses has effectively hampered any significant price fluctuations for Caprolactam during this period.
Focusing on Germany, the market has experienced the most notable price changes within Europe. The overall trend for Caprolactam in Germany reflects a consistent stabilization, despite the sector's struggle with weak demand and accumulated stock. Seasonality impacts were minimal, as the market saw no significant deviation between the first and second half of the quarter. The price comparison within Q2 remained flat at 0%, reinforcing the stable sentiment prevalent in the region. Europe is experiencing lacklustre demand for the product, particularly in the construction and automotive sectors. As a result, traders maintained their prices.
Analyzing the year-over-year comparison, Caprolactam prices have decreased by 22% from the same quarter last year, underscoring a significant contraction. However, when compared to the previous quarter in 2024, there was a 10% increase, indicating some recovery momentum. Despite these variances, the pricing environment in Germany has predominantly been stable, influenced by a strategic balance of supply and prudent inventory management.
MEA
The second quarter of 2024 witnessed a notable decline in Caprolactam (CPL) prices across the MEA region, prominently driven by subdued demand from downstream industries, particularly the textile sector. A sluggish global economic environment, compounded by logistical disruptions and fluctuating raw material costs, dampened the purchasing activity. The market dynamics were influenced by cautious restocking behaviors as enterprises opted to minimize inventory levels amidst uncertain demand patterns. The consistent supply of CPL, coupled with moderate overseas pricing, added to the downward pressure on market prices.
The market saw an overall -8% decline from the same quarter last year, reflecting a weakened purchasing sentiment and tepid demand from key sectors. Comparing to the previous quarter in 2024, prices adjusted downward by 2%, showcasing continued market instability. Seasonality played a role, with the first half of the quarter noting a steeper -5% price reduction compared to the latter half, indicative of a gradual accumulation of oversupply.
The price of Caprolactam in the UAE concluded the quarter at USD 2090/MT CFR Jebel Ali. This decremental trend underscored a negative pricing environment, heavily influenced by ample product availability and moderate demand. Companies remained hesitant to increase their CPL inventories due to the weak performance of the textile and automotive sectors, leading to a stable yet subdued market outlook. Overall, the second quarter was marked by a consistent decline, with the CPL market facing adverse conditions and no immediate signs of recovery.
For the Quarter Ending March 2024
North America
The Caprolactam pricing in the North American region during Q1 of 2024 continued to be influenced by various factors impacting the market. The supply chains were still being impacted, leading to volatility in prices. Fluctuations in raw material prices also contributed to the unstable market conditions. Furthermore, the sluggish demand from downstream sectors persisted, further adding to the pricing volatility. The United States remained the most affected country, experiencing significant changes in prices.
During Q1 of 2024, the trend and seasonality of Caprolactam prices in the USA remained stable, supported by moderate supply. However, there was a slight increase in prices compared to the second half of the previous quarter, indicating an expected improvement in new orders. The year-on-year comparison of prices remained stable with no significant changes.
It is worth mentioning that there were plant shutdowns reported in January 2024 due to freezing weather conditions. One notable shutdown was observed at the BASF SE plant in Freeport, Texas. The plant was closed on January 13, 2024, and resumed operations on January 26, 2024. This temporary shutdown had a short-term impact on the Caprolactam supply in the region.
The latest price of Caprolactam DEL Houston in the USA during Q1 of 2024 remained at USD 1702/MT. Overall, the dynamics of the supply chain, fluctuations in raw material prices, and demand from downstream sectors continued to play a crucial role in shaping the Caprolactam pricing in North America during Q1 of 2024.
APAC
During the first quarter of 2024, the price of Caprolactam (CPL) exhibited a mixed trend in the APAC region. While China and Korea experienced price increases, India followed the opposite trend. The rise in the cost of feedstock Benzene in the APAC region had a significant influence on the overall CPL market. Further, the spring holidays in China have led to increased costs in the Chinese market, with manufacturers responding to this by adjusting their pricing structures. The most recent survey by the International Textile Machinery Federation (ITMF) in March 2024 indicates a textile industry landscape characterized by cautious optimism amid ongoing hurdles. While there was a modest improvement in the business climate from November 2023 to January 2024, the situation overall remained challenging by March 2024, highlighting the enduring struggles companies encounter throughout the textile value chain. The predominant issue continues to be weak demand, casting a shadow over marginal enhancements in order intake and capacity utilization rates.
Europe
During the first quarter of 2024, the European market witnessed contrasting trends in Caprolactam prices. Caprolactam prices remained steady throughout the initial two months. However, despite price stability, demand for Caprolactam was lackluster in Europe during this period. This subdued demand was primarily attributed to the abundant availability of Caprolactam in the market, leading to a decline in fresh orders. As the quarter progressed, there was a notable upsurge in prices, primarily driven by the preceding month's increase in Benzene prices. Moreover, ongoing disruptions in ocean routes adversely impacted the supply of feedstock materials, exacerbating the situation. Consequently, this supply chain disruption reverberated throughout downstream derivative markets, contributing to price fluctuations. In response to these market dynamics, manufacturers adjusted their pricing strategies by increasing quotes. This strategic move aimed to bolster profit margins after a prolonged period of constrained price ranges. By the end of the quarter, the price of Caprolactam FD Hamburg in Germany had surged to USD 2410/MT, reflecting the culmination of these market forces.
MEA
During the entirety of the first quarter of 2024, the price of Caprolactam experienced a notable increase, primarily driven by escalating prices in exporting countries, which consequently impacted the UAE market. Despite this upward trend, demand for Caprolactam in downstream sectors remained relatively moderate. The higher prices of feedstock Benzene in Q1 further compounded the challenges faced by downstream sectors. However, beyond the impact of increased costs, the market also grappled with multiple disruptions, which exerted additional upward pressure on prices. Business capacity was notably affected by disruptions to input freight arrivals, stemming from the Red Sea shipping crisis. These disruptions not only created pricing challenges but also caused significant delays in delivery times. Companies reported experiencing the poorest supplier performance in a year, exacerbating the already complex market conditions. The latest price of Caprolactam CFR Jebel Ali in the UAE market for the first quarter of 2024 was USD 2170/MT. This reflects the overall price increase in the region due to the disruptions and strong demand observed during this period.
For the Quarter Ending December 2023
North America
Caprolactam pricing in North America in Q4 2023 witnessed to a declining pattern due to the feeble trading activities among enterprises. The oversupply of Caprolactam in the market led to a decline in demand, primarily due to reduced buying activities and high-interest rates. This resulted in a bearish market situation with low demand and moderate supply.
The lackluster demand for Caprolactam can be attributed to the economic uncertainty and customers continuing to reduce stock levels. The decline in prices was influenced by supply and demand imbalances and fluctuations in raw material prices, primarily benzene.
In the USA, the prices of raw material benzene remained weak which influenced the downstream derivative sectors, including Caprolactam. The year-end offer sales could lead to destocking of materials, but improved buying activities are expected in the domestic market. Overall, the Q4 2023 Caprolactam market in North America faced bearish conditions with moderate supply, low demand, and oversupply.
APAC
The Caprolactam market in the APAC region during Q4 2023 was characterized by low demand and ample supply, which can be attributed to several factors such as reduced production levels, subdued customer demand, and abundant supply prevalent in the market. The reduction in the price of the raw material, pure benzene, played a significant role in this decline, weakening overall cost support. Concurrently, downstream demand experienced a decrease, leading to a more cautious approach to procurement. The Caprolactam production unit exhibited a gradual recovery with an increase in supply. In December, the decline in new foreign sales showed signs of moderation, with new export business contracting at a marginal rate, marking the slowest pace in six months. The supportive factors contributing to the performance of Caprolactam were the weakening conditions in downstream industries, particularly in the textile and electrical sectors. These industries, which form a crucial part of the market, experienced a softening, influencing the overall dynamics of Caprolactam sales in the international market. Overall product demand is not robust, and inquiries from the overseas market are subdued as the year ends.
Europe
The Caprolactam market in Europe witnessed a bearish trend in Q4 of 2023, with subdued demand and moderate supply being the top factors affecting the market. The lackluster demand for the product was primarily due to the abundant supply prevalent in the market, leading to a cautious procurement approach by downstream industries. High-cost pressure from the import cargo from the overseas market also impacted the market. In Germany, the consistent narrow price range observed for Caprolactam was a result of subdued demand reflected in low orders received from the domestic market. The continued decline in new orders from the domestic market during October further contributed to a reduction in purchasing activity within the German market. The downstream industries, specifically mentioning Polyamide 6, appeared to be cautious in their procurement approach, only making purchases on a need basis. This lack of proactive buying from downstream industries indicates a more conservative and reserved stance, possibly influenced by market conditions or strategic considerations.
MEA
Caprolactam experienced a bearish market in the current quarter of 2023 for the MEA region. The moderate supply and reduced buying activities led to a decline in demand for the product. The stable to weak pattern in the global prices of the raw material benzene also influenced the declining trend observed in the market. The United Arab Emirates witnessed a decline in demand due to reduced buying activities, and the affordability of imported cargo from the Asian market played a significant role in keeping Caprolactam prices in the UAE market low. The combination of sufficient supply, stable inventory levels, and cost-effectiveness from Asian sources contributed to the steadiness in the price of Caprolactam during this period, even amid an overall positive trajectory in the non-oil economy. In December, merchants and buyers in the market adopted a cautious approach, primarily purchasing Caprolactam as needed, without committing to significant stockpiles. Additionally, the decrease in domestic inquiries further contributed to the subdued demand, particularly at the end of fourth quarter.
