Since April, after experiencing a strong rally in the first quarter, the caprolactam market has entered a period of high-level gaming, with intensified tug-of-war between upstream and downstream players. Although costs remain relatively firm, the supply side has seen a gradual recovery in volumes due to the restart of some units. Meanwhile, transmission resistance from the demand side is pushing upward, weakening fundamental support and causing caprolactam prices to retreat from highs.

Recently, with the restart of some caprolactam units under maintenance and a reduction in downstream PA6 operating rates, the caprolactam supply pattern has turned loose, diminishing the supply-side support for prices. Additionally, PA6 chip prices have been trending lower, narrowing the spread between chips and caprolactam, with some instances even seeing price inversions. Polymerization enterprises have shown obvious resistance to high-priced raw materials, causing the spot market negotiation center for caprolactam to gradually move lower. As of Friday, the spot price of caprolactam in the East China market stood at 12,600-12,700 yuan/ton, with acceptance delivery.

Domestic Caprolactam Supply-Demand Balance Sheet (Unit: 10,000 tons)

| Data Type | Data | This Week | Last Week | Change |
| --- | --- | --- | --- | --- |
| Supply | Output | 12.79 | 12.21 | 0.58 |
| | Import Volume | 0.20 | 0.20 | 0.00 |
| | Total Supply | 12.99 | 12.41 | 0.58 |
| Demand | Domestic Consumption | 12.58 | 13.17 | -0.59 |
| | Export Volume | 0.20 | 0.20 | 0.00 |
| | Total Demand | 12.78 | 13.37 | -0.59 |
| Supply-Demand Gap | Weekly Theoretical Balance | 0.21 | -0.96 | 1.17 |
Data Source: chempricehub Information

From a caprolactam supply-demand perspective, some units that were previously under maintenance have gradually restarted. Dongming Xuyang has resumed operations, Hunan Petrochemical is gradually starting up, Fujian Yongrong has restarted, and Cangzhou Phase II units have seen maintenance. As a result, caprolactam supply is gradually recovering. On the downstream consumption side for PA6: Integrated enterprises in Shandong, Shanxi, and Henan have reduced polymerization loads, and some single-unit polymerization enterprises in Jiangsu have also cut back. The Jinjiang unit under maintenance has yet to restart. Caprolactam consumption has declined, supply has turned loose, and this is constraining prices.

On the downstream side, demand for high-priced raw materials is met with strong resistance and risk aversion. PA6 chip inventories have gradually increased since March, and sales have become even weaker in April. Specifically, inventories of conventional spinning chips have risen to 17 days, a five-year high. Under inventory and sales pressure, PA6 chip prices have continued to decline. This week, the price of conventional spinning PA6 chips in East China fell to 12,800-13,000 yuan/ton for ordinary materials, with short-term cash delivery. High-speed spinning chip prices also saw a slight decline, with East China high-speed spinning premium spot chip prices at 13,600-14,000 yuan/ton, with acceptance delivery.

Looking ahead, the caprolactam market is likely to continue its supply-demand tug-of-war. On the cost side, pure benzene is currently in a destocking phase, and with crude oil prices remaining firm, this continues to support pure benzene prices, which are relatively strong and expected to maintain around 8,500-8,700 yuan/ton in the short term. On the supply side, Hunan Petrochemical is gradually restarting, and some integrated enterprises have reduced polymerization loads, increasing the available volume of caprolactam. Overall caprolactam supply remains ample. On the demand side, some downstream PA6 polymerization units continue to cut operating rates, and chip prices are still declining, keeping pressure on the demand side. In summary, the caprolactam market is expected to remain in a state of game, but with weakening fundamental support, prices are likely to fluctuate within a range of 12,500-12,900 yuan/ton in the near term.