Cyclohexanone prices in Germany plunged during the early week of December, marking a sharp decline in market conditions. This price drop was largely driven by weak demand from key downstream sectors, notably construction and textiles, which significantly impact Cyclohexanone consumption. These sectors faced a combination of challenges that led to reduced industrial activity and, consequently, lower demand for Cyclohexanone.

The construction sector, a major consumer of Cyclohexanone, continued to face substantial difficulties in late 2024. A drop in new orders, rising construction costs, and logistical challenges significantly hampered sector activity. Political instability in Germany, including the collapse of the coalition government, added further uncertainty to the construction outlook. With upcoming elections and a political vacuum in the country, confidence in the market remained low. The sector's struggles, coupled with higher material costs and reduced output, directly impacted the demand for Cyclohexanone.

Similarly, the textile industry, which uses Cyclohexanone in the production of caprolactam and adipic acid (precursors to nylon), also faced weak demand. Ongoing logistical issues, compounded by the ongoing geopolitical tensions from the war in Ukraine, continued to disrupt supply chains. The textile sector's reliance on recycled materials and its struggle to meet demand exacerbated the fall in Cyclohexanone consumption, further suppressing prices.

On the supply side, the market was pressured by increased Cyclohexanone production capacity, leading to a potential surplus. Despite the stable supply of benzene, a key raw material in Cyclohexanone production, and the declining trend in its prices, the market remained oversupplied relative to demand. Logistical disruptions, such as rising freight rates and congestion at European ports, added additional strain on the supply chain. These disruptions were particularly notable as freight companies faced capacity constraints while preparing for the Chinese New Year, exacerbating delays and supply chain challenges.

Cyclohexanone prices in early December 2024 were mainly driven down by weak demand from key sectors such as construction and textiles, despite a stable supply of benzene and falling prices. Market experts suggest that while restocking activities in Q1 2025 could offer some support, the extent of the recovery remains uncertain. A modest price rebound of around 2% is expected as economic activity picks up in early 2025. However, increasing competition from lower-cost Asian adipic acid imports could further pressure European prices.

The future demand for Cyclohexanone in Germany remains uncertain, with economic factors such as industrial production levels and seasonal variations expected to have a significant impact on consumption. In the short term, the usual seasonal pattern of destocking could further dampen buying interest, as industries typically reduce inventory levels ahead of the holiday season and slower production activities. This pattern could exacerbate the already subdued demand environment. While there is some expectation for a modest recovery in early 2025, driven by seasonal restocking and economic rebound, the overall market outlook remains under pressure. Any recovery will depend largely on broader economic conditions, supply chain improvements, and competition from Asian imports.