Crude Oil May Keep Low Nylon Price Down

According to the statistics of the business community, as of March 27, the nylon filament DTY in Jiangsu had reported 15567 yuan/ton, down 1266 yuan/ton from the beginning of the month, or 7.52%, down 26.92% year on year; Nylon POY price was 13520 yuan/ton, down 800 yuan/ton, down 5.59%, down 26.36% year on year; Nylon FDY price was 17000 yuan/ton, down 1000 yuan/ton, down 5.56%, down 26.88% year on year.

Unbalanced supply and demand, crude oil prices plunged. On March 6, the new round of "OPEC+" production reduction negotiations broke down, and the international oil price fell 30% to around $30/barrel on that day. As of March 27, WTI crude oil fell by 52.01% in March. Oil producing countries began to increase production and cut prices to seize the market. Saudi Aramco, the Saudi oil giant, said that the supply would reach 12.3 million barrels per day in April. Russia responded that it was able to increase production by 500000 barrels per day to a record 11.8 million barrels per day. Iraq, Nigeria, the United Arab Emirates, Kuwait and other countries have also announced to join the production increase army. Crude oil production is increasing, but demand is falling sharply. The COVID-19 epidemic is spreading worldwide, control measures in many countries and regions are upgraded, aviation, transportation, travel are reduced, and economic activities are slowing down. Crude oil may remain low.

The cost support collapsed, the demand was flat, and the price of nylon raw materials fell sharply. The price of cyclohexanone fell by about 1200 yuan/ton in March, and the actual market quotation was between 5600-6100 yuan/ton. Caprolactam fell by about 1300 yuan/ton, and PA6 fell by about 2200 yuan/ton. The downstream mainly consumes inventory, and the willingness to purchase is not strong. PA6 inventory has become a problem, with a large decline.

In March, some nylon enterprises were still in the order production state before the year because the raw materials were still in place before the year, the factory operating rate was low, the purchase intention was not strong, and the high inventory cost supported the quotation. In the middle of March, most manufacturers successively lowered their quotations, and some enterprises have kept their weekly decline at about 500 yuan/ton in the near future. From the price trend chart of cyclohexanone and nylon POY, it can be seen that the price of crude oil is low or difficult to change. Cyclohexanone fell precipitously in the middle and last ten days of March, while the price trend of nylon POY is relatively flat. Filament manufacturers are still in the stage of inventory digestion and price exploration.

Crude oil is at a low level, and nylon orders are weak. With the consumption of inventory, the cost decreases, and the pricing gradually drops. Business agency analysts believe that the cost support is insufficient, and orders are also not optimistic. It is expected that nylon will continue to decline.