Dutch Cyclohexane Prices Incline with High feedstock Prices: Demand Remains Subdued

Prices of Cyclohexane have marginally inclined by 0.5% in the Dutch market during the month of January 2024 due to increasing prices of feedstock Benzene inclined by approximately 8% increasing production costs.

The demand of Cyclohexane from the downstream Caprolactam was largely moderate as the textile industry continued to witness post festive dullness after the termination of festive December 2023. Moreover, the secondary demand of Cyclohexane from the paints and coating industry also witnessed a soft turnaround due to the construction sector continuing to underperform in January 2024 and minor fluctuations anticipated in the automotive sales. In terms of construction, contractions continued to be centered around house building activities with commercial and civil engineering activities witnessing moderate performances.

 In terms of international demand, the demand of Cyclohexane from the French and Belgian markets remained mostly subdued as the construction sector remained mired in deep downturn during the start of 2024. Input costs faced by the French and Belgian constructors further recorded an uptick in January 2024. All building project categories saw a decline in work completed in January 2024, with particularly noticeable declines in residential and commercial development further detrimentally impacting the demand for the product from the paint and coating sector. The outlook of the construction sector in the importing French and Belgian market was largely gloomy with investment confidence continuing to lay in the negative territory. The textile industry also did not witness any noticeable movements in January 2024 due to low demand from Caprolactam further reducing the demand for Cyclohexane.

In terms of supply, supplies of Cyclohexane faced challenging weather conditions which increased transportation costs and led to limitations in transportation and logistics. This consequently increased the lead time for deliveries. The market situation of Cyclohexane in Netherlands continued to be driven around increasing prices of feedstock Benzene and limitations in trading conditions across exporting Germany from where Cyclohexane is largely imported into Netherlands. 

Overall prices of the product are expected to be driven by increasing prices of feedstock Benzene in Europe. Furthermore, upstream Crude Oil prices area also anticipated to increase. With the improvement in weather conditions expected in February 2024, construction activities in the importing French and Belgian market likely to witness an increment thereby pressurizing the demand from the paints and coating industries. Moreover, the anticipated recovery of the automotive sector is also expected to add pressure to the downstream paint and coating industry.