Looking at the entire polyester market, it has basically been “stable” in the past half month. Some raw materials can even be described as sluggish, but there is a little red in this green jungle – nylon, not only It is nylon yarn, including its upstream caprolactam and nylon chips, which have increased by nearly 16% compared with the same period last month.
Today, a letter from Sinopec about adjusting the listed price of caprolactam is flooding the circle of friends. Everyone laments that supply is tight, supply exceeds demand, and price increases are imminent. So what is the driving force for caprolactam to rise again this time?
Environmental inspections continue, caprolactam supply is tight
Central environmental protection inspection began in July 2015, and the Central Deep Reorganization Group reviewed and approved the “Environmental Protection Inspection Plan (Trial)”. So far, three batches of inspectors have been organized to station in 22 provinces and cities including Jiangsu, Shaanxi, and Anhui. The inspection time for each batch is one month, and the rectification time is three months.
In August, the final fourth batch of inspections will be conducted in eight provinces: Sichuan, Jilin, Zhejiang, Shandong, Hainan, Tibet, Qinghai, and Xinjiang. Environmental protection departments in Shandong, Jilin, Sichuan, Zhejiang and other places have begun deployment and self-inspection.
As a highly polluting enterprise, caprolactam manufacturers are undoubtedly at the forefront. Once the inspection comes, the production operations and downstream demand of enterprises that have stopped production in the early stages and are about to start will be affected to varying degrees. This is also one of the reasons that drives the price of caprolactam to firm or even rise further.
A new PA6 device will be put into operation in the second half of the year to offset the crisis of new caprolactam production capacity
(Figure 1)
(figure 2)
Figure 1 shows the expected new production capacity in August, and Figure 2 shows the new PA6 production capacity in the second half of 2017. It can be seen that the new PA6 production capacity may be able to relieve part of the caprolactam overcapacity crisis. In addition, it is understood that the inventory of nylon chip manufacturers is currently at a low level, and the chip manufacturers with raw material inventory are operating at almost full capacity. The supply of caprolactam is very tight. Some nylon chip companies have the mentality of “buy more as the price goes up”, which makes caprolactam out of stock. There is no pressure on the goods, which has further boosted the price surge. However, some slicing companies said that the current price is too high and they are still in a wait-and-see state.
In short, the author believes that the following three factors will support the price of caprolactam: 1. Early order support; 2. Downstream demand is acceptable, such as core-spun yarn, which is in peak demand season; 3. The severe environmental inspection situation has led to the addition of caprolactam production capacity It cannot be put on the market immediately. Therefore, it is expected that the price of caprolactam will remain high and strong in the future.
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