Caprolactam Prices Show Regional Variability in November 2024 Amid Demand Slumps and Supply Chain Challenges

In the first half of November 2024, Caprolactam prices experienced varied trends across major regions. The U.S. and the European market initially saw a decline in prices, followed by stabilization. Meanwhile, in China, Caprolactam prices continued their downward trajectory, driven by subdued demand, especially in the textile sector.

In Germany, Caprolactam prices saw an initial decline before stabilizing as the automotive sector struggled with inventory-driven sales rather than fresh production, reflecting broader market weakness. The textile industry, plagued by oversupply and logistical disruptions, added to the subdued demand. Manufacturers faced difficulties in improving profitability due to competitive pressures and an inability to pass on costs. Despite these challenges, Caprolactam inventory levels remained adequate, supported by lower transportation costs, which helped maintain supply chain efficiency. However, a slow economic recovery and uncertainties in global trade further weighed on market confidence.

Meanwhile, Caprolactam in the Asian market extended its price decline as weak export demand and cautious procurement from downstream buyers kept activity muted. In China, the domestic automotive sector showed resilience with growing sales, but this was offset by a contraction in export orders due to global economic headwinds. The textile sector, despite entering its traditional peak season, struggled with subdued demand as the prolonged late summer heat delayed consumer purchases of seasonal goods. However, market participants anticipate a rebound in textile demand as forecasts of an exceptionally cold winter are likely to drive sales of apparel, providing some optimism for the Caprolactam demand in coming months. Declining feedstock costs and sufficient inventory levels added further downward pressure, while Global port congestion remains elevated through the past week with poor weather continuing to affect port operations in South China.

In the U.S., Caprolactam prices initially fell due to weak demand and sufficient supply before stabilizing in the second week. The automotive sector benefitted from improved consumer sentiment and inventory adjustments, with holiday season incentives supporting stable demand. However, new export orders remained subdued, and inflationary pressures persisted, adding uncertainty to the market. The textile sector faced headwinds from lower exports following Hurricane Helene, impacting downstream demand for Caprolactam. Supply-side disruptions, including hurricane-related logistical delays, extended delivery times and accumulated inventories, further tempered market activity.

As 2024 concludes, Caprolactam prices in China are expected to rise, driven by strong demand from the textile sector ahead of the winter season. In the U.S., prices are likely to remain stable, supported by improved consumer sentiment in the automotive sector, although inflation and potential tariff changes pose risks. In Europe, a continued decline in prices is likely, with weak demand from automotive and textile sectors, excess inventory, and ongoing economic challenges. While China and the U.S. may see some support, the European market is set to face ongoing price pressure.