Cyclohexane Prices Stabilize in Europe Amid Mixed Demand Trends from Key Industries

By the end of October 2024, Cyclohexane prices in the European market had stabilized after significant declines earlier in the month. The drop-in feedstock Benzene prices played a major role in reducing production costs. However, demand from downstream paints and coatings industries remained sluggish, with suppliers receiving minimal orders and warehouses remaining well-stocked. The demand for Cyclohexane from both the paints and coatings sectors and the textile industry was moderate, with little growth observed. Suppliers focused on clearing existing inventories, contributing to the downward pressure on Cyclohexane prices.

In the construction sector, demand for Cyclohexane was similarly weak. From January to August 2024, building permits for new homes fell by 19.3%, totalling 33,900 fewer units compared to the same period in 2023. This decline, one of the steepest in recent years, raised serious concerns about the housing market's stability. In August alone, only 18,300 new dwellings were approved, a 6.8% drop from August 2023, creating a negative outlook for the demand conditions of Cyclohexane from the downstream paints and coating industry

The single-family home segment was especially impacted, with permits down 26.6% to just 25,300 units. Multi-family housing approvals also dropped significantly, decreasing by 19.6%, which left only 75,400 new apartments in the pipeline. This reduction in construction activity directly lowered the demand for Cyclohexane, as fewer projects translate to a decreased need for chemicals used in paints and coatings. Overall, these factors created a challenging environment for Cyclohexane suppliers amid reduced orders from the construction sector.

On a more positive note, the textile industry showed some signs of improvement. In the third quarter, Adidas reported a 10% increase in currency-neutral revenue, with total revenues rising 7% to $6.95 billion. The company anticipates an operating profit of $1.3 billion for the year, expecting currency-neutral revenues to grow by about 10%. Adidas noted that double-digit growth in football drove a 5% increase in apparel sales, while accessories saw a 10% gain. Direct-to-consumer sales rose by approximately 7% year-over-year, and wholesale sales increased 13% on a currency-neutral basis during the third quarter, which may have contributed to a slight balancing in the European Cyclohexane market.

Despite these positive developments, the overall Cyclohexane market remained bearish due to a 2.2% drop in Benzene prices, which complemented a 1.7% decline in Cyclohexane prices during the third week. Looking ahead, prices of Cyclohexane are expected to rise as consumer confidence in the German market improves, alongside increased demand from the nylon industry, which typically peaks in the winter season.