Favorable Factors Boost Shandong Cyclohexanone Market Prices by Over 30% in March

April 1st News

I. Price Trends

In March, the market price of cyclohexanone in Shandong region of China showed a trend of "sharp rise first, then high-level consolidation." In the early part of the month, the market rapidly increased due to multiple positive factors. After mid-month, influenced by macroeconomic factors and changes in supply and demand, the price slightly adjusted downward but remained at a high level, with a cumulative price increase of 31.03% for the entire month.

2. Analysis of Core Influencing Factors

Cost Side: Resonance of Raw Material and Geopolitical Disruptions Forms Strong Support

The core raw material for cyclohexanone is pure benzene, which has a relatively high cost proportion. Therefore, the trend of raw material prices directly affects the production cost of cyclohexanone. In early March, the escalation of geopolitical conflicts in the Middle East pushed international crude oil prices to rise significantly, driving up the price of pure benzene. This led to a significant increase in the production cost of cyclohexanone, providing strong support for companies to raise their quotes.

Mid-month, as the geopolitical situation temporarily eased, crude oil prices fell, leading to a decline in pure benzene prices. This weakened the cost support, creating conditions for a slight decrease in cyclohexanone prices.

Supply and Demand Landscape: Transition from Tight to Loose, Sustaining Momentum Faces Uncertainties

First, let's look at the supply side. After maintenance and resumption of production, the market experienced a temporary tightening followed by a loosening. At the beginning of March, some major facilities entered planned maintenance, and some companies had previously reduced their operating loads. This led to a contraction in effective supply, with spot inventories remaining low, creating a temporary tight balance that directly pushed prices up quickly.

In the latter part of the month, as maintenance facilities gradually restart, the market supply steadily increases, gradually alleviating the previous tight supply situation. The support for prices from the supply side weakens.

On the demand side, as we enter spring, downstream industries such as adipic acid, nylon 66, and other chemical fibers, as well as the coatings industry, are entering their traditional peak season. Coupled with the release of restocking demand triggered by earlier low-priced raw materials, rigid demand procurement significantly increased in the first half of the month, providing some support to prices. However, as prices rapidly surged toward the 10,000-yuan mark, cost pressures on downstream enterprises intensified sharply, causing purchasing intentions to cool down rapidly. From the middle of the month onward, procurement mainly consisted of small, on-demand orders, and there was insufficient acceptance of high-priced supplies—this became a key factor behind the price’s temporary surge followed by a subsequent decline.

3. Future Market Forecast

Analyzing from the perspective of supply and demand as well as costs in China

From the supply side, the cyclohexanone maintenance facilities have basically resumed production, and the market supply will steadily increase, with supply pressure continuously rising, further weakening the support for prices. Although downstream demand has improved due to the peak season, overall rigid demand procurement is unlikely to sustain a significant increase, and there is insufficient acceptance of high-priced goods, which will constrain demand. In terms of costs, if crude oil and pure benzene prices remain high, they will still provide some cost support for cyclohexanone prices.

From a technical perspective

From the spot commodity market analysis system, it can be seen that at the beginning of March, the 10-day moving average of cyclohexanone crossed above the 20-day moving average, and all the short-term (10-day) moving averages were higher than the long-term (20-day) moving averages. Starting from early March, the overall market trend of cyclohexanone in China showed an upward trend. By the end of March, the 10-day moving average of cyclohexanone crossed below the 20-day moving average, suggesting that the spot market price of cyclohexanone is likely to show a downward trend during the forecast period. The auxiliary indicators show that in the 5 price levels of cyclohexanone, the 10-day and 20-day moving averages are in the mid-to-lower range, indicating that the decline in the price of cyclohexanone is expected to be limited. It is necessary to closely monitor the fluctuations in crude oil prices, the operation of facilities, and changes in downstream orders.