The global Caprolactam market in December 2024 showed mixed trends, shaped by regional demand shifts, feedstock fluctuations, and sector-specific challenges. Early stability from steady production and robust supply chains gave way to divergence later in the month. China faced weakening prices due to subdued textile demand and oversupply, while Germany saw initial bearishness followed by a brief recovery driven by cost-push factors.

In China, Caprolactam prices remained stable at the start of December, supported by a steady recovery in the downstream automotive sector and rising feedstock costs for benzene. This price stability encouraged an uptick in procurement activity for Caprolactam, aligning with broader production needs. However, mid-month, the market turned bearish as feedstock costs eased, offering limited cost support. Demand from the textile sector weakened significantly due to delayed seasonal purchases and sluggish order flows, exacerbated by high inventory levels of products. Producers were compelled to offer discounts to clear stock, further amplifying the downward trend. Despite stable domestic production and improved logistical efficiencies, including the addition of shipping capacity in November, purchasing activity remained focused on immediate operational needs, leaving the market under continued pressure.

In Germany, Caprolactam prices experienced a sharp decline at the beginning of December automotive and textile industries. Despite record production of electric vehicles, the German automotive sector continued to grapple with weak domestic demand compounded by a decline in the broader manufacturing sector, reflected in falling new orders and rising production cuts. The textile industry mirrored the bearish sentiment, experiencing pre-holiday retail sales slowdowns due to cautious consumer spending. Easing inflation did not translate into increased foot traffic, as many consumers opted to save amid economic uncertainties. Inventory build-ups and discounted offers from producers further dampened purchasing activity, amplifying the downward trend in Caprolactam prices. However, the mid-month witnessed a slight uptick and subsequent stabilization in prices. This shift was attributed to an increase in feedstock benzene prices, which raised production costs. While demand from the automotive sector remained subdued, supply-side pressures and cost-push factors contributed to the Caprolactam price increase.

Entering 2025 and looking towards Q1, the Caprolactam market faces distinct regional challenges. In China, while post-year-end restocking may offer initial support to demand, the strength of the textile sector’s recovery will be critical. Continued weakness in textiles could limit Caprolactam consumption despite any restocking activity. In Germany, the automotive sector's performance will be paramount. While some restocking is anticipated, sustained recovery in automotive production and consumer demand for vehicles, especially EVs, is crucial for driving significant Caprolactam consumption. Feedstock price volatility, particularly for benzene, remains a key risk factor for both markets, potentially impacting production costs and prices.