In the first half of February 2025, the global caprolactam market exhibited an upward price trend, influenced by distinct regional dynamics in China and Germany. China's market was driven by supply tightening and rising feedstock costs, while Germany saw price increases supported by supplier margin recovery efforts and rising energy costs, despite subdued demand.

In China, the caprolactam market witnessed a steady improvement by mid-February. At the onset of February, the market-maintained stability as post-holiday manufacturing activities resumed, with companies focusing on inventory replenishment. Supplier delivery times improved, alleviating previous logistical challenges, and ensuring continuous production.

However, as the month progressed, Caprolactam prices escalated, driven by a tightening supply chain, and rising feedstock costs, especially for cyclohexanone and phenol. The cyclohexanone market in Shandong Province gradually resumed operations post-Spring Festival but remained elevated. Concurrently, the phenol industry faced supply constraints due to the planned shutdown of Zhejiang Petrochemical's second-phase phenol-acetone plant, reducing the industry's operating rate to 80%.

Despite these upward pressures on prices, the automotive sector, a major consumer of caprolactam, demonstrated only moderate demand as automakers opted primarily for inventory restocking in a measured post-holiday recovery.

Similarly in Germany, the caprolactam market saw a slight price improvement despite subdued demand, particularly from the automotive sector. Following significant destocking at the end of 2024, most buyers held sufficient inventory, limiting the need for additional purchases. This trend was further exacerbated by ongoing economic challenges, which led consumers to defer major investments.

However, supply-side constraints played a pivotal role in supporting price increases for Caprolactam. Suppliers sought to improve profit margins after a period of heavy destocking and weak prices at the end of the previous year, with lower-priced customers absorbing the largest hikes. Additionally, rising natural gas prices and increasing feedstock benzene and phenol costs added further pressure, contributing to the upward price trend of Caprolactam. Despite weak demand, business expectations reached their highest levels in nearly three years, driven by optimism for lower interest rates and a potential economic upturn following the upcoming elections.

Looking ahead, future trends in the caprolactam market appear cautiously optimistic in both regions despite present supply pressures and soft demand in certain sectors. In China, sustained improvements in manufacturing efficiency and the gradual stabilization of feedstock costs could mitigate further price escalations, while ongoing inventory management in key consuming industries may eventually stimulate incremental demand. In Germany, renewed business confidence driven by expectations of lower interest rates and an anticipated economic upturn following the upcoming elections is likely to spur increased consumption of Caprolactam, particularly in the automotive sector.

As market participants adjust to these evolving conditions, both regions may experience a gradual realignment of prices, with long-term demand recovery poised to support a more balanced caprolactam market.