Lead: Recently, the price of sulfur, one of the raw materials for caprolactam, has been continuously rising. This has driven up caprolactam production costs, exacerbated corporate losses, and strengthened producers' willingness to support prices. As a result, caprolactam prices have stopped falling and rebounded.

1. Sulfur prices continue to climb, driving caprolactam costs higher

Benzene, sulfur, and coal are key raw materials that caprolactam enterprises need to procure externally. Among them, benzene has a consumption rate close to 0.9, and sulfur close to 0.4. Due to its higher consumption rate and unit price, benzene is the most significant raw material affecting caprolactam costs and prices. However, with the recent sharp surge in sulfur prices, sulfur's impact on caprolactam costs has increased markedly. In 2024, sulfur prices ranged from 800 to 1,600 yuan/ton, with sulfur costs accounting for less than 10% of total caprolactam costs. In 2025–2026, sulfur prices gradually rose, increasing their cost share and raising production costs for caprolactam enterprises.

After March, due to the Middle East situation, sulfur supply and transportation were constrained, leading to rapid price increases. In June, domestic major sulfur resources began a targeted distribution mode, reshaping the original regional supply-demand pattern. Cross-sector sourcing by other chemical downstream users, coupled with replenishment operations by long-term contract buyers, further amplified the market resource shortage, propelling the upward trend. Tradable port cargo became scarce, and sulfur prices at East China ports repeatedly hit new highs.

2. Caprolactam enterprises’ losses deepen; intention to maintain low operating rates

Currently, the benzene price remains around 7,700 yuan/ton, while sulfur prices keep climbing. However, caprolactam and its by-product ammonium sulfate prices are weak, leading to worsening losses for caprolactam enterprises. This week, the production gross profit of caprolactam is -3,283 yuan/ton, down 563 yuan/ton from last week. The plant gross profit is -1,040 yuan/ton, down 700 yuan/ton from last week. Under loss conditions, the overall capacity utilization rate of caprolactam enterprises remains below 70%. Combined with recent load reductions by some enterprises, the overall supply-demand pattern for caprolactam is in a tight balance.

Summary of Caprolactam Plant Operations This Week

| Company Name | Capacity (10,000 tons) | Operation Status |
|---|---|---|
| Cangzhou Xuyang | 51 | Phase I shut down, Phase II at ~60%. |
| Dongming Xuyang | 30 | Operating at 95%. |
| Shanxi Lubao | 10 | Normal production. |
| Shanxi Yangmei | 30 | 200,000-ton unit normal, 100,000-ton unit shut down. |
| Shanxi Lanhua | 14 | Shut down. |
| Luxi Chemical | 65 | Phase III under maintenance; total load of three units at 50%. |
| Nanjing Dongfang | 40 | Shut down. |
| Baling Hengyi | 50 | Operating at ~60%. |
| Zhejiang Juhua | 10 | Shut down. |
| Fujian Tianchen | 35 | Operating at ~80%. |
| Fujian Shenyuan | 100 | Operating at ~95%. |
| Yongrong Technology | 65 | Operating at ~70%. |
| Pingmei Shenma | 38 | Operating at ~60%. |
| Hunan Petrochemical | 60 | Operating at ~80%. |
| Hubei Sanning | 75 | Operating at slightly below 60%. |
| Hualu Hengsheng | 40 | Operating at 70%. |
| Lunan Chemical | 40 | Load reduced to ~50%. |
| Guangxi Hengyi | 60 | Operating at 70%. |
| Total | 813 | Load 68.18% on June 11; weekly average 69.48%. |

3. Downstream PA6 low-price sales improve; chip prices rebound after destocking

The PA6 chip market sentiment has improved recently. End users and PA6 chip intermediaries had low chip inventories earlier, with most PA6 chip stocks concentrated at factories. Recently, PA6 chip prices fell to low levels, and expectations of upstream price increases became evident. The replenishment sentiment among end users and intermediaries improved. After PA6 chip inventories declined, chip prices gradually rebounded. By June 12, the East China market price for PA6 regular spinning chips rose to 11,700–11,900 yuan/ton, with some quotes above 12,000 yuan/ton. PA6 high-speed spinning chips were at 12,200–12,400 yuan/ton (D/A delivery).

In the caprolactam market, supported by strong costs and improved supply-demand fundamentals, prices have increased. Currently, the East China market caprolactam price has risen by 400 to 11,500 yuan/ton (D/A delivery), and caprolactam enterprises intend to further raise prices to widen the benzene-caprolactam spread and reduce losses.

4. Market Outlook

Cost: The benzene market has recently lacked independent fundamental movements, mainly fluctuating with crude oil prices. It is expected that the East China benzene market will remain in the range of 7,600–7,800 yuan/ton in the short term. The sulfur market, amid volatile Middle East geopolitics and tight domestic supply, is likely to maintain its strong stance, keeping comprehensive caprolactam cost pressure high.

Demand: PA6 chip prices have rebounded after recent destocking, but the sustainability of trading sentiment remains to be seen. End-user demand currently lacks substantive improvement momentum. This round of downstream procurement is mainly for replenishment on a need basis. As chip prices rise further, downstream enthusiasm for chasing higher prices may cool.

Supply: Due to tight raw material supply and their own losses, caprolactam enterprises lack the incentive to increase operating rates. In the later period, operating loads may remain at or below 70%, keeping caprolactam supply in a slightly tight balance in the short term.

In summary, cost pressure remains a key factor supporting caprolactam prices. Enterprises have a strong willingness to support prices to reduce losses. The caprolactam market may continue its upward trend. In the medium to long term, attention should be paid to upstream raw material price fluctuations and downstream demand transmission.