According to the monitoring of the Business News Agency, the average price of PA6 at the beginning of the year in 2022 was 15633.33 yuan/ton. As of December 31, the price of PA6 was 13333.33 yuan/ton, down 14.71% throughout the year. The overall trend was high and then low, and the decline was concentrated in the middle of the year.
The market trend of PA6 in 2022 is mainly divided into three stages:
The first stage: high shock stage. According to the monitoring of the Business News Agency, the average price of PA6 was 15633.33 yuan/ton on January 1. After that, the market fluctuated and rose to the annual high of 16666.67 yuan/ton on March 12 and June 9 respectively, with a range increase of 6.61%. During this period, the stock boom before the Spring Festival pushed up the price of some brands. After the holiday, the market was affected by the health event and the logistics was blocked. The downstream enterprises resumed work slowly and the demand release lagged behind. Fortunately, the upstream market of lactam was strong, and the spot price of PA6 was raised. Since then, there has been a tug of war between the cost side and the demand side, and the price reached the highest point of the previous year for the second time in early June. On the whole, the fundamentals in the first stage are mixed, and generally fluctuated at high levels.
The second stage: rapid decline stage. According to the monitoring of the Business News Agency, the price of PA6 increased from 16666.67 yuan/ton on June 9 to 13733.33 yuan/ton on September 1, with a rapid decline of 17.60%. At this stage, the oil and chemical industry chain continued to be affected by the turbulence in Europe, and the international crude oil fluctuated violently, driving the prices of pure benzene and caprolactam in the upstream to fall sharply. In addition, with the background of long-term tepid load of downstream enterprises, PA6, which has lost its cost-side support, fell rapidly. During this period, the market turnover was dismal, and most of the business operations were to make profits and ship goods. On the whole, the market in the second stage fell into a deep pattern of weak cost and demand.
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The third stage: the consolidation stage of the weak. According to the monitoring of the Business News Agency, as of December 31, the price of PA6 was 13333.33 yuan/ton, down 2.91% from 13733.33 yuan/ton at the beginning of September. At the beginning of this stage is the traditional demand peak season “Golden Nine”, but the fulfillment of the seasonal consumption volume in 2022 is not good, and the demand peak is short-lived, only pushing up the market in the first half of September, resulting in the embarrassing situation of “the peak season is not prosperous”. After the caprolactam supply contracted, the price of PA6 found a fulcrum and stopped rising. Near the end of the year, the increase of PA6 price gradually retreated with the reduction of large-scale stock. In addition, the upstream profits were exhausted, and the market price fell again. Three stages
In general, the trend of PA6 market in 2022 is mainly affected by the following aspects:
The trend of raw material caprolactam is differentiated, and the cost side of PA6 is cut to the bottom
In 2022, the caprolactam market fluctuated widely. According to the monitoring of the Business News Agency, the average spot price of domestic caprolactam was 11066.67 yuan/ton as of December 31, 2022, down 21.51% from 14100 yuan/ton at the beginning of the year. The price position of the first half and the second half of the year was relatively different. In the first half of the year, the tense situation in Europe pushed up the international crude oil price, resulting in a rise in the price of pure benzene and caprolactam, which supported the price of PA6. In the second half of the year, affected by macro inflation and the Federal Reserve’s interest rate increase, the market worried more. The price of crude oil fluctuated violently, and the bad news was transmitted downward along the petrochemical industry chain, and caprolactam turned down, and then it was sorted and operated in a weak position. In addition, 300000 tons of caprolactam will be put into production in 2022 in China. Although the growth rate of the industry is slower than that in 2021, the overall enthusiasm of the industry has declined due to overcapacity and poor profitability of enterprises. The caprolactam market as a whole supported the decline of PA6.
V. Steady expansion of enterprises and further easing of industry supply
China’s PA6 industry has steadily expanded its production and capacity in recent years. According to the business news agency, in 2022, five enterprises in China will expand or build new units. If the new capacity is realized on time, the backward capacity of 134000 tons/year will be eliminated, and the total domestic PA6 capacity will reach 6158000 tons/year. Under the background of the gradual increase of the total domestic capacity, the pressure on the supply side will gradually increase, and the price level will be difficult to rise or fall.
The downstream load of the main force is not high, and the support force at the demand end is insufficient
The downstream of PA6 is mainly concentrated in chemical fiber textiles, engineering plastics, fishing nets and other fields. Among them, nylon filament is the main downstream of PA6, accounting for about 59% of consumption in 2022. Secondly, the consumption of engineering plastics accounted for about 17%. Thirdly, industrial silk and BOPA account for about 9% and 6% respectively. The change of demand proportion of downstream industries is limited, but under the macro economic environment in 2022, terminal demand will shrink significantly.
Take the nylon industry as a representative, the average operating rate in 2022 is 73.85%, and the overall demand is insufficient. The rest of the downstream are also impacted by the macro environment, resulting in different degrees of demand weakening. According to statistics, the estimated consumption of PA6 in 2022 may decrease by more than 0.80% compared with 2021. In the face of the steady growth of PA6 supply, the consumption that does not increase but decreases has really caused considerable pressure on the supply side.
Aftermarket forecast: PA6 analysts of the Business Agency believe that the capacity of PA6 will expand steadily in 2022, and downstream enterprises will be cautious in stocking goods, and the overall load level is not high. The consumption level shrank throughout the year, and the market was in a long-term pattern of contradiction between supply and demand. Upstream caprolactam fluctuated violently, the market fell in the second half of the year, and the support for PA6 declined. In terms of news, the current global inflationary economic environment remains unchanged, and the geopolitical conflicts in Europe promote the wide fluctuation of oil prices, which have a different degree of negative impact on the PA6 market. To sum up, in 2022, the PA6 industry’s negative situation is superimposed, the activities tend to be conservative, and the market momentum is general. The new capacity of PA6 in the current month is concentrated, and it is expected that the market situation of PA6 will continue to be weak in the short term. In the long run, the consumer side and the supply side will grow and fall, and it will take time for PA6 market to get out of the contradiction between supply and demand.
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