Gloomy Demand Decreases the Polyamide 6 Prices in Germany at the End of Q2 2023

The price of Polyamide 6 witnessed a declining trend in June 2023 due to the weak demand in the German market. The downstream textile industry remained in a downturn for several reasons, such as rising interest rates and high inflation in the region.

Further, the feedstock Caprolactam and upstream Benzene market remained in a bearish trend in the Eurozone, which helped the cost support for Polyamide 6 and petrochemical markets. Over the past seven days, the textile industry has dropped by 1.7% in German, indicating the demand for Polyamide 6 reduced in the market.

At the conclusion of the second quarter of 2023, the German economy lost significant momentum due to weakening demand conditions and a corresponding slowdown in the expansion of economic activity. At the end of the second quarter of 2023, companies stated that demand conditions had worsened. This was highlighted by a decrease in the total inflow of new work for the second consecutive month, with the pace of drop accelerating to the fastest since last December. In the manufacturing sector, where order books for Polyamide 6 amid signs of customer hesitation and destocking remained the key area of weakness. While new business in the service sector grew in June, the growth rate dropped to its weakest level since February, in keeping with warnings from some companies that rising prices and higher interest rates were depressing demand. Since there was less demand for Polyamide 6 in manufacturing, there was more discounting, which decreased the average input prices in the industrial sector.

Manufacturers reported a drop in output prices during June 2023 as inflationary pressures elsewhere diminished. Even though inflation rates are slowing down, costs and selling prices in the service sector have continued to climb sharply, partly due to higher wages and rising interest rates.

Recent market sentiments revealed a further deterioration in company optimism for the year ahead, with expectations decreasing for the fourth consecutive month to their lowest level in 2023 thus far. In the manufacturing industry, where businesses expressed worries about a persistent decline in new orders of Polyamide 6 and a broader economic slowdown, pessimism increased.

The German Polyamide 6 market is predicted to decrease due to the declining business optimism for the coming year. Businesses raised concerns over the ongoing decline in new orders and the general economic slowdown. Over the previous week, the German Polyamide 6 market had a 2% drop.