U.S. Cyclohexanone Market Resilient as Prices Hold Steady Amid Economic Headwinds

Texas (USA):  In the first week of July, the Cyclohexanone price dynamics continued to remain steady in the US market due to balanced supply and demand dynamics and various market factors, indicating a well-aligned market with no significant pressure from supply disruptions or excessive demand. On the supply side, U.S. Cyclohexanone production facilities operated at levels that met domestic demand, preventing price fluctuations. According to data from the U.S. Energy Information Administration (EIA), U.S. crude oil inventories stood at 445.1 million barrels as of July 1, marking a decrease from the previous week.

Adequate inventory levels at both producer and distributor levels ensured that temporary supply disruptions did not lead to price changes. Additionally, stable prices for Benzene, a key raw material for Cyclohexanone production, helped maintain steady production costs. During the first week of July 2024, Cyclohexanone prices in the U.S. remained stable at USD 1605 per metric ton, FOB Texas, with no change from the previous week.

Demand for Cyclohexanone was driven by balanced downstream sectors across key industries such as nylon production, adipic acid production, pesticides and herbicides, and the coatings industry. These sectors maintained production levels that matched the current supply of Cyclohexanone, contributing to stable prices. The U.S. housing market, which has seen growth for a significant portion of the last two years, appears to be showing signs of slowing down. Construction expenditures saw a slight decline, primarily impacted by reduced activity in single-family home construction. The overall economic environment in the U.S., characterized by a significant slowdown in inflation, further supported stable demand. Consumer prices rose by only 3% year-over-year in June, down from May’s 3.3%, easing pressure on manufacturers and contributing to a stable pricing environment for Cyclohexanone.

Balanced export volumes for the commodity from the US market to European countries such as the Netherlands, UK, Israel, and Ireland also contributed to the stability in Cyclohexanone prices. The impact of Hurricane Beryl on the US market, which closed many Gulf Coast ports, including the Port of Houston, further complicated the shipping situation.

Looking forward, the market is expected to remain stable, although potential fluctuations in Benzene prices and seasonal demand changes in downstream industries could influence Cyclohexanone prices. Any increase in Benzene prices due to heightened global demand or supply constraints could elevate production costs, impacting Cyclohexanone prices. As per ChemAnalyst, Cyclohexanone prices are expected to move steadily amid the balanced demand from the downstream market. Broader economic trends and developments in the global shipping industry will also influence supply chain dynamics and pricing stability.