Lead: Recently, the domestic cyclohexanone market has seen ample spot supply, while the price fluctuation range of the upstream raw material, pure benzene, has narrowed significantly. Coupled with low operating rates at downstream caprolactam plants and sufficient cyclohexanone supply, the market is under pressure and experiencing volatile declines. As of June 11, the cyclohexanone price in Shandong was quoted at 8,700 yuan/ton, ex-works in cash; in East China, the price was 9,100-9,150 yuan/ton, delivered in cash.

Fundamentals Bearish, Cyclohexanone Prices Fluctuate Downward

Recently, the domestic cyclohexanone market has been trending downward with volatility. Upstream pure benzene maintains a weak volatile trend, offering insufficient cost support. Spot supply of cyclohexanone in the market is ample. In contrast, downstream caprolactam and adipic acid plants are operating at relatively low rates. Specifically, the utilization rate of caprolactam units continues to decline, while demand from downstream fiber integration is weak. Meanwhile, cyclohexanone plant operating rates remain relatively stable, creating a supply-demand disparity. The intensifying tug-of-war between bullish and bearish sentiments is driving prices down. As of June 11, the cyclohexanone price in Shandong was referenced at 8,700 yuan/ton, ex-works in cash; in East China, the price was 9,100-9,150 yuan/ton, delivered in cash.

Cyclohexanone and Downstream Product Profit Analysis

| Product | This Period | Previous Period | Change |
| :--- | :--- | :--- | :--- |
| Cyclohexanone | 100 | 307 | -207 |
| Caprolactam (Production Margin) | -3,283 | -2,720 | -563 |
| Caprolactam (Unit Margin) | -1,040 | -340 | -700 |
| PA6 | -590 | -920 | 330 |
| Nylon Filament Yarn | -880 | -640 | -240 |

Currently, the integration of cyclohexanone-caprolactam production chains is maturing. Looking at the profitability across the chain, cyclohexanone maintains a small profit, while downstream products such as caprolactam, PA6, and nylon filament yarn are all operating at a loss. Integrated plants prioritize cyclohexanone output, increasing the volume of merchantable material in the market and putting pressure on prices. Consequently, cyclohexanone profit margins have also shrunk this week. Compared to the same period last week, cyclohexanone profit decreased by about 200 yuan/ton on June 11. By process, the hydrolysation method for cyclohexanone is marginally loss-making at 35 yuan/ton, while the oxidation method shows a loss of up to 1,035 yuan/ton.

Caprolactam Operating Rates Decline, Merchant Spot Supply Increases

| Producer | Capacity (10,000 tons/year) | Unit Status |
| :--- | :--- | :--- |
| Yangmei Fengxi | 6 | Normal production, primarily supplies Taihua |
| Dongming Xuyang | 37 | Mainly for captive use, small amount for merchant sales |
| Hualu Hengsheng | 52 | Low caprolactam operating rate, normal merchant sales |
| Weiming Petrochemical | 15 | Shutdown |
| Jiangsu Haili | 30 | Shutdown |
| Inner Mongolia Qinghua | 20 | Normal production |
| Henan Shouheng | 20 | Normal production |
| Chongqing Huafon | 20 | Normal merchant sales |
| Fujian Shenma | 80 | Mainly for captive use, normal merchant sales |

Source: chempricehub Information

According to statistics from chempricehub Information, as the degree of cyclohexanone-caprolactam integration continues to increase, most downstream plants achieve self-sufficiency, with only a few factories selling merchant volumes. However, due to recent losses in caprolactam, more plants are reducing output to support prices. Consequently, their procurement demand for cyclohexanone has shifted to just-in-time, small-volume purchasing.

Tug-of-War, Cyclohexanone Weakening and Volatile

From a supply-demand perspective, the supply of merchantable cyclohexanone is ample, with spot supplies relatively stable. With low caprolactam operating rates, purchasing interest is not high. Downstream buyers purchase on a need-to basis and show low acceptance of high prices. Regarding feedstock, pure benzene lacks independent fundamental trends recently and mainly follows crude oil price fluctuations. In summary, the fundamentals for cyclohexanone are bearish, and the short-term cyclohexanone market is likely to continue its weak volatile trend.