Cyclohexanone Prices Rise in Europe Amid Steady Demand and Production Hurdles

Cyclohexanone prices saw notable increases in both Germany and the Netherlands due to a combination of moderate demand, fluctuating raw material costs, and supply constraints in early September. This price trend of Cyclohexanone was influenced by various factors in the downstream and upstream markets, alongside seasonal and geopolitical developments.

In early September 2024, Cyclohexanone prices saw a notable increase in both the Netherlands and Germany. In the Netherlands and similarly in Germany, prices rose, reflecting a weekly increase of 1.4%. This upward trend was driven by moderate demand from downstream sectors such as nylon, adipic acid, and caprolactam production, alongside seasonal fluctuations that boosted consumption. Despite the decline in benzene costs, which typically affects production expenses, ongoing high production costs continued to support elevated prices of Cyclohexanone in both regions.

The crude oil market experienced significant turbulence as U.S. crude oil prices fell to their lowest level since June 2023, marking an 8% weekly decline, the steepest drop since October. Brent crude prices also dropped by 9.8%. This downturn was compounded by OPEC+ delaying its planned production increase of 180,000 barrels per day until December, introducing uncertainties about global supply and demand. These developments had a ripple effect, affecting related markets and sectors, including construction, where the EU's forecast for the year was revised to a 1.5% decrease from an initial 0.5% decline, though positive signs such as rising house prices and increased building permit issuance indicated a potential rebound in building material production.

In Germany, Cyclohexanone supply constraints were exacerbated by technical issues at production facilities, leading to higher prices. Despite a 2% decline in benzene costs, elevated production costs continued to drive prices up of Cyclohexanone. Additionally, BASF's announcement to cease adipic acid production at its Ludwigshafen site by 2025 will impact the downstream market for this key component in nylon and other applications.

Cyclohexanone prices in the Netherlands were similarly affected by supply constraints due to technical issues at production facilities. Seasonal fluctuations and ongoing production costs supported higher prices despite the decline in benzene costs. In the coatings sector, Dutch coatings manufacturer Stahl’s acquisition of Weilburger Graphics, a producer of varnishes, inks, and adhesives, is expected to enhance Stahl's position in the food, cosmetics, and pharmaceutical packaging markets. This move follows Grebe Holding’s earlier sale of Weilburger Coatings to Kansai Helios in May 2024. The acquisition and production changes reflect significant shifts in the coatings and chemicals industry.

Looking forward, the Cyclohexanone market is expected to remain influenced by seasonal demand fluctuations and raw material cost changes. The upcoming months may see varied price trends of Cyclohexanone based on global economic conditions, seasonal consumption patterns, and potential adjustments in benzene costs. Monitoring these factors will be crucial for anticipating future price movements and market dynamics of Cyclohexanone.