1、 Market Overview
In July, the domestic PA6 spot market experienced a bottoming out recovery, followed by a slight decline after a surge. At the beginning of the month, the spot price remained stable at 12666.67 yuan/ton. In the first half of the month, relying on downstream stage replenishment, there was an upward trend. The short-term moving average crossed the long-term moving average one after another, and the price surged all the way to above 12600 yuan/ton; The upward momentum gradually weakened in the latter half of the month, and the market fluctuated sideways. At the end of the month, there was slight pressure and a slight decline. On August 4th, the spot price fell to 12500 yuan/ton, a decrease of 0.79% for the day. Throughout the month, the market has already departed from the low range of June, and the annual price is at the mid to high level of the one-year cycle, showing an overall upward trend of first rising and then falling.
2、 Cost analysis
The weekly closing price of upstream raw material caprolactam in July remained stable for a long time, and the upstream pure benzene market fluctuated narrowly. There was no significant rise or fall in the raw material end, providing stable bottom cost support for PA6 chips.
The production load of the caprolactam industry is stable, the market supply of goods is sufficient, and the initiative in raw material prices is insufficient; However, due to device maintenance and enterprise controlled shipment, the downward space for raw material prices is also limited. Overall, the trend of raw material costs this month is relatively stable, and the fluctuation of PA6 slicing market is mainly dominated by downstream supply and demand fundamentals. Raw materials only play a bottom support role and are difficult to drive slicing to rise significantly.
3、 Supply and demand analysis
1. Supply side
Most of the domestic PA6 production enterprises are operating normally, and the overall operating load of the industry remains high, with sufficient supply of market basic goods. At the beginning of the month, the slicing price was at a low level for the year, and some factories took the initiative to reduce operating rates, control spot shipments, and digest the backlog of inventory in the early stage; With the price recovery, manufacturers gradually resumed normal production scheduling, and the supply of spot goods increased accordingly.
Mid month market price increases have driven traders’ enthusiasm for stockpiling, resulting in an increase in social inventory; At the end of the month, downstream procurement cooled down, and factory inventory once again piled up. Manufacturers lowered their spot prices to accelerate shipments, and the overall market supply is in a relaxed state.
2. Demand side
July belongs to the traditional off-season of the textile and injection molding modification industries, but downstream textile enterprises of nylon have started stocking up ahead of the peak season, which has driven the recovery of demand in the slicing market and is the core driving force behind this round of price increases.
In the first half of the year, downstream yarn and synthetic fiber factories urgently needed to replenish their inventory, and the market transaction atmosphere was hot, driving up spot prices; The first round of raw material stocking in the second half of the year has basically ended, and orders for terminal fabrics and home textiles are still weak. Downstream factories have stopped taking large quantities of goods and turned to sporadic purchases on demand, causing a decline in market transaction heat. At the same time, the demand for injection molding modification sector is flat, and the orders in the automotive parts and plastic products industries are weak, making it difficult to provide additional upward momentum. The weak demand at the end of the month has led to a slight decline in prices.
4、 Short term forecast
The domestic PA6 market is likely to experience high volatility in the short term. The trend of the cost side caprolactam market is stable, with solid bottom support; At present, the spot price is at the mid to high level of the year, and there is a certain upward pressure above it.
In the coming period, the traditional peak season of the textile industry is gradually approaching, and there is an expectation of further release of downstream textile enterprises’ stocking demand, which will provide favorable support for slice prices; However, the current supply of spot goods is abundant, and the recovery speed of terminal finished product orders is relatively slow. It is difficult for the market to experience a unilateral surge, and the overall trend will maintain range oscillation, waiting for downstream peak season orders to land.
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