August 26 news
I. Price Trends
According to the monitoring data, as of August 26, the average price of premium industrial-grade cyclohexane in China was 6,666 CNY per ton. Mid-week (August 24), some information sources recorded the national spot average price spiking to 7,600 CNY per ton (a single-day increase of 4.11%, and a weekly increase of 8.57%). However, this was mainly due to the price support from by-products in Shandong and sample deviations, with actual mainstream transactions not increasing in volume. The market's fundamental nature is a "cost-driven rise" rather than a rise due to a shortage.
2. Market Analysis
Market Perspective: Plant Operating Rates: Overall operating rates for cyclohexane plants in China are between 62% and 66%. Plants such as Luxi, Hualu Hengsheng, and Haili have resumed operations after maintenance. Shanxi Lanhua’s 20,000-ton/year byproduct plant has remained idle since July and has not yet restarted. However, integrated plants continue to export substantial volumes of commercial products, and social inventories remain at a moderately high level. Supply Characteristics: Price increases are driven primarily by rising costs, coupled with sellers holding firm on prices; this is not an increase driven by actual shortages. Factory inventories are moderately high, large orders are scarce, and traders generally offer discounts to facilitate sales. As a result, the supply side exhibits limited upward elasticity in terms of pricing.
On the cost front: With the U.S.-Iran standoff and concerns about the safety of navigation through the Strait of Hormuz, WTI crude oil prices have rebounded above $80 per barrel, while Brent has climbed to over $91 per barrel. The bottom support for the naphtha-to-benzene chain has shifted upward. As for benzene, Sinopec’s listed benzene price has risen three times in mid-August, accumulating a total increase of 650 yuan to reach 8,000 CNY per ton; spot prices in East China are now at 8,180–8,300 CNY per ton. Commercial inventories at Jiangsu ports have fallen to 29,000 tons (down 27.5% month-on-month and 79.86% year-on-year), hitting historically low levels. Margins for blending oils and disproportionation continue to provide bottom support for aromatics; hydrogenated benzene prices have also remained relatively strong, reaching 6,275 CNY per ton.
Downstream Demand: Caprolactam (the largest downstream sector): The industry is operating at about 68%, with liquid transactions in East China at 12,100 CNY/ton; however, its downstream PA6 is only operating at 64%, and the yarn/injection molding sector is in the off-season, with only low inventory restocking, showing low willingness to chase higher prices. Adipic acid/cyclohexanone: Adipic acid is operating at 64%, with prices following up to 8,100–8,300 CNY/ton, but theoretical losses for factories exceed 1,000 CNY/ton; downstream PBAT is operating at about 20%, and PA66 is less than 50%. Cyclohexanone plants are operating at 70–75%, with slight increases. Solvents and rubber additives: Due to summer environmental protection measures and the off-season, small orders dominate, and overall, the downstream sector has a low acceptance of high cyclohexane prices, with large orders being rare.
Supply side: The overall operating rate of China's cyclohexane plants is 62-66%. Luxi, Hualu Hengsheng, and Haili have resumed operations after maintenance. A 20,000-ton/year by-product facility of Shanxi Orchid has been shut down since July. Integrated facilities (with caprolactam/cyclohexanone units) still offer a large amount of merchandise, with social inventory at a moderately high level and no sense of tightness in factory inventory. Some plants in Shandong were briefly shut down, causing a temporary shortage of spot supply in the region, but this has been alleviated with the restarts. The supply characteristics are such that the price increase is not due to a lack of supply. There is a coexistence of inventory holders holding firm on prices and traders offering discounts, limiting the upward elasticity of prices from the supply side.
3. Future Market Prediction
The cyclohexane analyst believes that with ultra-low inventory levels at benzene ports and the geopolitical premium on crude oil still in place, cyclohexane prices are likely to rise easily but face limited upside potential. It is expected that China’s benchmark price for premium-grade cyclohexane will range between 6,500 and 6,900 CNY per ton, while ex-factory prices in Shandong are forecast to fluctuate strongly within the 6,200–6,600 CNY per ton range. In East China, high prices are returning to the level of actual transaction prices, and inflated quotes continue to be phased out.
