Prices Fell Sharply In May, And Caprolactam Profits Narrowed.

chart 12019 Caprolactam, PA6 Slicing price chart

Source: lung Chung

The PA6 polymerization plant suffered serious losses in 4-5 months, and the manufacturers reduced production more. In particular, the production of caprolactam plants partially started down to below 5, and caprolactam demand decreased. In May, because caprolactam pre maintenance device was restarted, caprolactam supply increased, caprolactam was transferred from oversupply to oversupply, and the market price dropped sharply in May.

As of May 24th, the price of caprolactam liquid in the East China market was 12100-12300 yuan / ton, 2100 yuan lower than the beginning of the month, or 14.69%.

chart Two Gross profit analysis of Caprolactam

Source: lung Chung

Statistics show that in May, the price of pure benzene was basically in the range of 4450-4550 yuan / ton, and the price of liquid caprolactam in East China dropped from 12100-12300 yuan / ton to 14300 yuan per ton in the beginning of the month. The profit margin of caprolactam dropped to 56.19% yuan from 1700 yuan / ton in the beginning of the month.

surface 2018-2019 Monthly gross margin comparison of Caprolactam

Unit: Yuan / ton

project	Two thousand and eighteen year	Two thousand and nineteen year	Ups and downs	Ups and downs
One month	Three thousand and one hundred	Two thousand and twenty-eight	-1072	-34.58%
Two month	Three thousand one hundred and twenty	Two thousand four hundred and sixty-nine	-651	-20.87%
Three month	Four thousand six hundred and thirty-two	Three thousand two hundred and forty-two	-1390	-30.01%
Four month	Three thousand four hundred and sixty	Three thousand eight hundred and fifty-eight	Three hundred and ninety-eight	11.50%
Five month	Three thousand one hundred and fifty	Two thousand six hundred and seventy-nine	-471	-14.95%
average value	Two thousand eight hundred and fifty-five point two	Three thousand four hundred and ninety-two point four	-637.2	-18.25%

Source: lung Chung

By comparing the caprolactam gross profit between 1-5 months of 2018 and 2019, we can see that in 2019, the caprolactam market failed to be independent because of the weak demand of the whole industry, and its profitability declined as compared with 2018.

In the later stage, the overall supporting power of caprolactam market is insufficient due to the pessimism of terminal demand. In June, the United States will hold a hearing on the 300 billion tariff in the middle and later stages. The list of tariff products covers most of the products in the clothing and textile industry. If the tariff increases, it will suppress the later nylon market. Therefore, from the current situation, the overall situation of the nylon industry is emptiness, the high profit of caprolactam is difficult to continue, and the profit in the later stage will continue to narrow.