Cost-driven pressures coupled with tight supply push caprolactam prices to record highs.

Lead: The caprolactam market has recently accelerated its upward trend under dual support from costs and supply, with spot prices in East China hitting new highs. Geopolitical conflicts boosted crude oil prices and drove a sharp surge in pure benzene prices as the primary driver, while factors such as plant maintenance, low enterprise inventories, and tight spot supply also supported the upward movement of caprolactam prices.

Cost and Supply Support Boost Caprolactam Prices to New Highs

Caprolactam market prices have risen continuously from around 11,800 CNY/ton in early August to above 13,500 CNY/ton this week, an accumulated increase of nearly 14%. This rally has been mainly driven by the significant rise in pure benzene at the upstream cost end. As upstream feedstock prices climbed, caprolactam production costs continued to rise, providing strong cost support. Meanwhile, some caprolactam plants remained operating at reduced loads, keeping the supply pattern tight. These factors together boosted caprolactam prices, with producers actively following the upward trend and spot prices rising to fresh highs.

Pure Benzene Accelerates Higher, Strengthening Cost Support for Caprolactam

Recently, due to the U.S. military strike on Iran and the sudden escalation of Middle East geopolitical conflicts, international crude oil prices rose sharply, with Brent firmly holding above USD 90/barrel. This provided strong cost support for pure benzene and quickly heated up market sentiment, driving pure benzene prices significantly higher. This week, East China pure benzene spot prices strengthened sharply, with the mainstream negotiation range at 8,110–9,040 CNY/ton. Sinopec raised its pure benzene listed price to 8,900 CNY/ton. Although pure benzene supply has returned and demand remains low — with rigid-demand plants resistant to high-priced feedstock and mainly consuming inventories, while East China port inventories accumulated — the influence of pure benzene fundamentals on market prices has weakened amid the crude oil rally, and the pure benzene price center has continued to move upward.

Caprolactam Supply Remains Tight, Supporting Price Rises

On the supply side, caprolactam output this week was 115,800 tons, down 1,600 tons from last week; capacity utilization was 66.94%, down 0.92 percentage points from the previous week. Looking at plant operations: Yangmei Taihua has been shut down for maintenance since August 22 (planned for about two weeks); Tianchen Yaolong is conducting minor maintenance of 3–5 days in early September; and Lunan Chemical plans to shut down for maintenance later for around 50 days. As a result, spot availability of caprolactam is limited in the near term, providing sustained support to prices. However, Luxi Phase III is gradually restarting, which will partially offset maintenance-related losses later.

Caprolactam Plant Operation Summary

Short-Term Cost and Supply Support Remains; Caprolactam Market Expected to Stay Firm

Looking ahead, upstream crude oil and pure benzene prices remain firm, with Sinopec’s pure benzene listed price at 8,900 CNY/ton. On September 4, East China pure benzene spot prices stood at 8,940–8,960 CNY/ton, keeping caprolactam costs high. On the supply side, Lunan Chemical plans to shut down for maintenance soon, while the Yangmei Taihua plant has not yet resumed after maintenance. Although the tightness of caprolactam supply may ease somewhat later, supply volume has not yet recovered in the short term, and caprolactam producers have limited spot availability, so prices are likely to continue following the upward trend. On the demand side, downstream PA6 chip prices have also continued to rise, though trading sentiment for chips at high prices has slowed somewhat. In summary, the caprolactam market is currently affected mainly by costs and supply, and is expected to operate firmly in the short term.

Main medium-to-long-term risks: Any easing of geopolitical conflicts would likely pull back the risk premium in crude oil and pure benzene, weakening cost support for caprolactam; if the Yangmei Taihua plant resumes production later and Luxi Phase III operates steadily, the supply tightness will ease; and terminal demand lacks obvious improvement, making it more difficult to pass through high-priced raw materials.