Improving Italian Construction Sector Drives German Cyclohexane Prices

The second half of February 2024 saw German Cyclohexane prices improving with an overall increment of approximately 4% on a weekly basis, mainly due to increasing prices of feedstock Benzene which inflated by approximately 14% during the same timeframe, consequently increasing production costs.

Overall positive demand of Cyclohexane was recorded from the construction sector of the importing Italian market as construction industry witnessed improvements mainly attributed to the National Recovery and Resilience Plan (PNRR), started by the Italian government. February 2024 saw buying activity increase at a strong rate again with construction firms expressing a greater need for materials due to starting new contracts, further adding pressures to the inventories of Cyclohexane as demand from the downstream paints and coating industries strengthened.

However, on a negative side, the cancellation of super bonus program saw renovation activities falling which created some degree of uncertainties to the demand for Cyclohexane.

Moreover, the demand of Cyclohexane in the Italian construction sector mainly originated from improvements across the segments of housebuilding and civil engineering activities, which saw improvements in February 2024. However, commercial building remained the worst performing segment in February 2024, but anticipations of improvements prevailed.

Despite the positive outlook, Italian construction firms witnessed increments in prices for raw materials including the paints and coating further pressuring the existing inventories of Cyclohexane.  In terms of supplies, deterioration in lead times for deliveries continued for the fifth consecutive month, with new orders on the rise firms maintained a cautious outlook in hiring and procurement of raw materials, including paints and coatings.

In terms of domestic construction activities, demand for Cyclohexane remained low in Germany due to construction sector being primarily subdued with firms being recorded to have pessimistic outlook for 2024. All three segments of the German construction sector that is housebuilding, commercial activities and civil engineering activities witnessed significant downturns, thereby maintaining a subdued demand of Cyclohexane from the paints and coating segment. 

In terms of manufacturing activities, Germany witnessed another round of decline in February 2024. Supplier delivery time continued to lengthen and was marked by the increased transportation costs. Overall demand for German goods continued to fall in February 2024 fueled by the Red Sea crisis. 

Overall, German Cyclohexane prices are expected to increase in March 2024 as minor improvements across the Italian construction sector which is expected to pressurize the downstream paints and coting industries and increasing prices of feedstock Benzene complemented with rising costs of upstream Naphtha and Crude Oil.