Introduction: In June, caprolactam costs experienced wide fluctuations, particularly as sulfur prices climbed to historical highs, placing significant pressure on caprolactam costs. However, as tensions in the Middle East eased later in the period, upstream crude oil, benzene, and sulfur prices retreated, dragging caprolactam prices lower. With cost support weakening in July combined with the off-season for demand, caprolactam prices are likely to continue their downward trend under pressure.

Cost Side: Benzene Prices Continued to Decline; Sulfur Prices Weakened and Corrected

| 2025-2026 Benzene Market Price Trend (CNY/ton) | 2024-2026 Sulfur Market Price Trend (CNY/ton) |
| --- | --- |
| | |
| Data Source: chempricehub | Data Source: chempricehub |

Recently, the caprolactam market has been significantly influenced by the trends of raw materials benzene and sulfur. Regarding benzene: benzene prices fell sharply in June as the geopolitical risk premium in crude oil gradually faded, pressuring market prices. Starting in mid-month, shipping through the Strait of Hormuz resumed, crude oil prices weakened, and benzene prices followed suit, initiating a rapid decline. By the end of June, benzene prices in the East China market had fallen to 6,560-6,690 CNY/ton, and Sinopec's benzene ex-plant price was lowered to 6,700 CNY/ton.

Regarding sulfur: the sulfur market experienced wide swings in June, with prices rising first and then falling. In the first half of the month, the tightening supply situation in the sulfur market intensified, driving sulfur prices continuously upward. Mainstream granular sulfur prices at Zhenjiang Port once rose to a historical high of 11,750 CNY/ton. However, later on, with the signing of the US-Iran Memorandum of Understanding, the heated atmosphere in domestic spot trading cooled significantly. As supply risk concerns notably diminished, the domestic trading sentiment abruptly shifted, causing sulfur prices to gradually correct from their highs. By the end of June, sulfur prices at Yangtze River ports had fallen to 8,900 CNY/ton, and prices in the Shandong market dropped to 7,747 CNY/ton.

| 2025-2026 Caprolactam Price Market Trend (CNY/ton) | 2025-2026 Caprolactam Price Comparison (CNY/ton) |
| --- | --- |
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| Data Source: chempricehub | Data Source: chempricehub |

The caprolactam market followed cost fluctuations in June, with prices rising first and then falling. In early June, due to the sharp rise in upstream raw material sulfur prices, caprolactam cost pressure increased significantly. As losses deepened, companies continued to reduce operating rates to mitigate losses. Additionally, some enterprises experienced short-term maintenance shutdowns, leading to a decline in overall caprolactam supply. With a relatively tight supply pattern, companies had a strong willingness to support prices, and caprolactam prices rebounded to 11,500 CNY/ton. Entering the second half of the month, as the geopolitical situation in the Middle East eased and navigation through the Strait of Hormuz saw substantial improvement, prices of upstream crude oil, benzene, and sulfur all declined. Cost support weakened, the downstream demand sentiment turned bearish, and the pace of raw material procurement slowed. Consequently, caprolactam market prices weakened and fell. By June 26, the spot price of caprolactam in the East China market was 10,900 CNY/ton on a DAP (delivered at place) basis.

Supply and Demand Pattern: Companies Continue to Reduce Operating Rates to Cut Losses; Caprolactam Supply Remains Relatively Tight and Balanced

Caprolactam Monthly Supply and Demand Balance Sheet (Unit: 10,000 tons, CNY/ton)

| Indicator | June | May | Change | Change (%) |
| --- | --- | --- | --- | --- |
| -- Production | 50.5 | 54.88 | -4.38 | -7.98% |
| -- Imports | 0.8 | 0.77 | 0.03 | 3.90% |
| Total Supply | 51.3 | 55.65 | -4.35 | -7.82% |
| -- Downstream Consumption | 51.91 | 54.17 | -2.26 | -4.17% |
| -- Exports | 1.53 | 1.64 | -0.11 | -6.71% |
| Total Demand | 53.44 | 55.81 | -2.37 | -4.25% |
| Supply-Demand Gap | -2.14 | -0.16 | -1.98 | -1237.50% |
| Average Price for Period | 11176 | 11923.68 | -747.68 | -6.27% |

Caprolactam supply decreased in June. June caprolactam production was 505,000 tons, a decrease of 43,500 tons from the previous month. Caprolactam capacity utilization was 69%, down 3.58 percentage points from the prior period. In June, caprolactam companies faced continued rising cost pressure. Under loss-making conditions, companies further reduced operating rates. There were also some short-term maintenance shutdowns, leading to an overall decline in supply, resulting in a relatively tight and balanced supply pattern.

Weak Cost Support and Off-Season Demand Ahead; Caprolactam Prices Likely to Continue Declining Under Pressure

In terms of costs, with the easing of the Middle East geopolitical situation, upstream crude oil, benzene, and sulfur prices are trending lower in a volatile manner. It is expected that cost-side support will continue to weaken in the coming period. On the supply side, caprolactam companies are mostly maintaining low operating rates, and overall capacity utilization may remain around 70%. Some units that underwent earlier maintenance are restarting, so the supply pattern is expected to move toward balance later on. Regarding demand, end-user demand has not shown improvement, and with raw material prices falling, downstream players are becoming more cautious in procuring materials. The demand side is expected to remain weak. In summary, the caprolactam market is likely to trend weakly in July, with the average price lower than in June. It is estimated that the average price of caprolactam in the East China market in July will be 10,400 CNY/ton, trading within a range of approximately 10,200-10,600 CNY/ton.