For the Quarter Ending December 2024
North America
The North American Cyclohexane market experienced a largely bearish situation during the period, driven by subdued demand conditions from the paints and coatings industries and a reduction in production costs, as indicated by the decline in feedstock Benzene prices. Construction spending also remained weak, further contributing to unfavorable procurement activities.
U.S. suppliers were reported to be utilizing existing inventories during the hurricane season as demand conditions remained stagnant. Export conditions were largely unfavorable due to strikes between the International Longshoremen's Association (ILA) and United States Maritime Alliance (USMX), which led to inventory accumulation at ports and prompted a decline in prices.
Supplies across the inland U.S. market improved as the market wound down for the festive holidays, adding further downward pressure on prices. Towards the end of the quarter, U.S. suppliers were actively liquidating inventories amid concerns over year-end tax repercussions and potential inventory devaluation.
Europe
The European Cyclohexane market witnessed a predominantly bearish trend during the final quarter of 2024, with prices experiencing a significant decline of approximately 18%. This substantial price drop was primarily attributed to the easing costs of feedstock Benzene, which directly influenced the production economics of Cyclohexane. Additionally, market dynamics were shaped by a consistent oversupply, as ample inventories combined with limited production outages continued to exert downward pressure on market prices throughout the quarter.
Export conditions remained challenging, further dampening market sentiment. The arbitrage window for Cyclohexane imports and exports to and from Europe remained firmly closed, restricting opportunities for external trade. Moreover, logistical challenges added to the market's difficulties, as several major European ports were undergoing maintenance, disrupting inland trading activities and delaying the movement of goods. These disruptions, coupled with subdued demand from downstream industries, exacerbated the bearish outlook for the Cyclohexane market.
As the year drew to a close, the market continued to be oversupplied. Suppliers increasingly focused on liquidating their inventories and clearing out warehouses to manage their year-end stock levels. This push to reduce inventories contributed further to the downward trajectory of prices. Despite the prevailing bearish environment, some producers attempted to counteract the falling prices by adopting strategic measures such as reducing their production run rates. This effort was aimed at slowing the supply influx and lending some stability to the market.
However, these attempts were largely insufficient to reverse the overall market sentiment. The combination of persistent oversupply, logistical hurdles, and unfavorable export conditions meant that the European Cyclohexane market closed the year in a state of continued price weakness.
APAC
The Chinese Cyclohexane market experienced an overall bearish trend during Q4 2024, with prices depreciating by approximately 10%. This decline was largely driven by oversupplied conditions in the feedstock Benzene market, which exerted significant downward pressure on Cyclohexane prices. Major feedstock Benzene producers across the Chinese market, including Sinopec China, were reported to have reduced Benzene prices by Yuan 100/MT between October and November 2024. This reduction directly eased the production costs of Cyclohexane, further reinforcing the bearish market situation.
Despite the reduction in feedstock costs, Cyclohexane production levels remained relatively low. This was attributed to the reduced operating rates of Benzene Dehydrogenation Units, which created localized supply constraints and exerted occasional upward pressure on the market. However, these factors were insufficient to counteract the broader bearish momentum driven by high inventory levels and subdued demand.
Towards the end of the year, liquidation of inventories became the dominant activity in the Cyclohexane market. Suppliers prioritized emptying their warehouses to manage stock levels, resulting in abundant supply in the domestic market. This oversupply significantly contributed to the continued depreciation of prices.
Additionally, export activity to Europe remained muted as the year came to a close. The lack of significant export opportunities further exacerbated the oversupply conditions within the Chinese market, compounding the bearish outlook for Cyclohexane. As a result, the market closed the year with ample supplies, weak demand, and continued price depreciation, reflecting the challenging conditions faced throughout Q4 2024.
For the Quarter Ending September 2024
North America
In North America, Cyclohexane prices were significantly impacted by a steep decline of approximately 16% in the prices of feedstock Benzene, which eased production costs for Cyclohexane manufacturers. Throughout this quarter, the market exhibited a bearish trend, driven largely by sluggish demand conditions from downstream industries such as paints and coatings, as well as textiles. Despite several plants in the Benzene market shutting down due to the ongoing hurricane season, supplies of Cyclohexane remained abundant. This oversupply was exacerbated by unfavorable export conditions toward the end of the quarter, largely influenced by strikes organized by the International Longshoremen's Association (ILA). These strikes created additional logistical challenges, complicating an already strained supply chain and leading to delays in shipments. The ongoing hurricane season further contributed to operational difficulties, disrupting production in critical manufacturing areas across the U.S.
As a result, many manufacturers struggled to maintain consistent output levels. Additionally, the downturn in the construction sector negatively affected exports to key European markets, resulting in a supply glut of Cyclohexane. This combination of factors created a challenging market environment, where despite the reductions in feedstock costs, the sluggish demand and logistical complications kept Cyclohexane prices under pressure.
Overall, the situation highlighted the interconnected nature of supply chain dynamics and market conditions, illustrating how external factors like weather events and labor strikes can significantly influence pricing and availability in the chemical market.
APAC
Throughout Q3 2024, the APAC region saw a downward trend in Cyclohexane prices, with China experiencing the most significant fluctuations. Several key factors contributed to this trend, including weak demand from downstream industries like paints and coatings and fluctuations in feedstock prices, particularly Benzene. These elements fostered a bearish market sentiment, resulting in a 2% decrease compared to the same quarter last year. In China, the supply of Cyclohexane remained abundant, largely due to multiple Benzene Dehydrogenation Units (BDH Units) resuming production after maintenance turnarounds in mid-June 2024. This surplus, coupled with low procurement activity, meant that buyers showed little interest in acquiring new materials, leaving many suppliers with excess inventories.
The initial stabilization in the first week of September was largely due to weather-related disruptions, including torrential rains that increased logistics and transportation challenges. This further complicated the circulation of materials. Overall, the market reflected persistent downward trends, influenced by difficulties in the construction sector and weak demand from various industries. Seasonal factors, particularly the monsoon season affecting construction activities, exacerbated the price decline. Notably, there was a significant 15% decrease in prices from the first half to the second half of the quarter. The quarter concluded with Cyclohexane prices at USD 965/MT FOB Shanghai, indicating a negative pricing environment characterized by consistent depreciation and an overall unstable market scenario.
Europe
Throughout Q3 2024, the European Cyclohexane market experienced a consistent decline in prices, influenced by several key factors. Weak demand from downstream industries such as paints and coatings, coupled with a decrease in construction activities, contributed to the downward pressure on prices. Additionally, a notable 8% rise in feedstock Benzene prices during the quarter heightened production costs, further impacting Cyclohexane pricing. This challenging market environment led to a negative trend in pricing dynamics.
In the Netherlands, where the most significant price changes were observed, the market followed the broader European trend of decreasing prices. Seasonality played a role, with the peak rainy weather season slowing down construction activities and affecting demand. The correlation between price changes in the region and the Netherlands remained evident, reflecting a coherent pricing landscape. Compared to the same quarter last year, prices saw a 2% decrease, while the quarter-on-quarter change for Q3 2024 was recorded at -3%. Notably, the second half of the quarter saw a substantial 8% price decrease. The quarter-ending price for Cyclohexane FOB Amsterdam in the Netherlands stood at USD 1460/MT, showcasing the prevailing negative pricing sentiment.
For the Quarter Ending June 2024
North America
During the second quarter of 2024, the North American Cyclohexane market faced predominantly bearish conditions. The market dynamics were heavily influenced by the pricing trends of its primary feedstock, Benzene, which initially showed stability at the start of the quarter but later depreciated by approximately 4.4% by the quarter's end. This decline in Benzene prices exerted downward pressure on Cyclohexane prices throughout the region.
Demand from key downstream sectors such as construction, paints, and coatings remained lacklustre during this period. Private and residential construction activities continued to decline, influenced by factors including rising mortgage rates and uncertainties surrounding the presidential election. The housebuilding sector, which constitutes a significant portion of construction spending in the US, experienced a notable downturn throughout the second quarter. This decline was exacerbated by diminishing confidence among housebuilders in a subdued market environment with fewer prospective homebuyers.
However, a positive development emerged towards the end of the quarter with an increase in public construction spending. This uptick provided some support to the North American Cyclohexane market as the quarter concluded, mitigating some of the overall negative sentiment.
Overall, the North American Cyclohexane market in Q2 2024 navigated through challenges posed by fluctuating feedstock prices and subdued demand from critical sectors, highlighting a cautious and challenging business environment for industry stakeholders.
APAC
Cyclohexane pricing in the APAC region for Q2 2024 has experienced a pronounced upward trajectory, driven predominantly by escalating feedstock costs and fluctuating supply dynamics. The primary factors contributing to this surge include increased prices of Benzene and Naphtha, essential raw materials in Cyclohexane production. Additionally, reduced operational hours due to seasonal heatwaves, coupled with rising production costs, have further constrained supply, exerting upward pressure on prices. The robust demand from downstream sectors, particularly paints and coatings, bolstered by significant infrastructural development initiatives, has also contributed to the upward pricing momentum.
In China, where the most substantial price changes have been observed, Cyclohexane prices surged by 40% compared to the same quarter last year, marking a significant annual escalation. From the previous quarter in 2024, prices rose by 13%, reflecting a sustained increase in production costs and constrained supply chains. The overall trend exhibited a consistent increase, driven by heightened freight charges, stringent maintenance schedules for key production plants, and tight inventory levels. Seasonality factors, such as the peak summer period and subsequent monsoon season, influenced demand fluctuations but generally maintained an upward pressure on prices. In comparison, the first half of the quarter saw prices relatively lower, with a noted 5% increase in the latter half, culminating in a quarter-ending price of USD 1280/MT FOB Shanghai. This persistent increase signals a positive pricing environment, underscored by robust demand and constrained supply, contributing to the continuous price rise observed in the region.
Europe
The second quarter of 2024 saw Cyclohexane prices in Europe experiencing an upward trajectory, driven by a confluence of significant factors. Chief among these were elevated production costs due to increased prices of feedstock Benzene and Naphtha, alongside tighter supply chains exacerbated by logistical constraints and adverse weather conditions. The manufacturing sector's cautious recovery, marked by a gradual uptick in demand from downstream industries like paints and coatings, also contributed to the bullish pricing environment. Despite occasional perturbations such as flooding and supply chain disruptions, the overarching sentiment in the market remained positive.
Focusing on Germany, which experienced the most pronounced price fluctuations, the overall trend in Cyclohexane pricing was distinctly upward. Seasonality played a notable role, with peak summer months typically spurring demand for construction-related paints and coatings, thus exerting upward pressure on prices. When comparing this quarter to the same quarter last year, prices surged by 18%, underscoring a robust year-on-year growth. Additionally, there was a 7% price increase from the preceding quarter in 2024, indicating sustained demand and supply chain constraints. Within the quarter, prices exhibited a modest 1% increase between the first and second halves, reflecting a stable yet steadily rising pricing environment.
The quarter concluded with Cyclohexane prices at USD 1640/MT FOB Nuremberg in Germany, a testament to the enduring positive sentiment in the market. The pricing environment, driven by persistent supply constraints and robust demand recovery, has been decidedly positive, reinforcing expectations of continued upward trends in the Cyclohexane market.
For the Quarter Ending March 2024
North America
The North American Cyclohexane market has witnessed an overall bullish situation during the opening quarter of 2024, due to increasing prices of feedstock Benzene and heightened demand from downstream construction sector.
Prices of feedstock Benzene inflated by approximately 22% during this quarter which directly resulted in the increased production costs of Cyclohexane across North America. Moreover, demand for Cyclohexane from the downstream paints and coating sector gradually improved during February 2024 after the freezing weather experienced by the US in early January 2024.
Overall demand conditions remained favorable from the downstream paints and coating industry as residential constructions improved. Also supporting the demand for the product was the improvement in the commercial construction activities. Moreover, the depreciation in the mortgage rates witnessed during the middle of February 2024 also forecasted a positive outlook for prospective homebuyers. Overall, in North America, residential construction continued to be driven by the perennial shortage of secondhand housing complemented by increased nearshoring activities to Mexico.
Asia
The opening quarter of 2024 witnessed an overall bullish market situation for Cyclohexane across Asia. Prices of the product recorded an increment of approximately 3.5% due to increasing production costs. The increments in the prices of the product are largely attributed to increments in the prices of feedstock Benzene, which inflated by approximately 18%, during this time frame. Therefore, the heightened production costs directly translated into the prices of Cyclohexane across Asia. However, demand conditions from the downstream paints and coating sector continued to remain unfavorable across Asia, and the importing East Asian market as the construction sector continued to underperform. The underperformance of the construction sector is indicated by declines in residential starts and falling investment sentiments across China. Moreover, challenging weather conditions, mostly due to rains across East China also further negated demand conditions. As demand conditions remained highly unfavorable. Therefore, procurements were carried out only as per requirement, which is why prices of Cyclohexane exhibited only a marginal increment in the prices during this quarter.
Europe
The opening quarter of 2024 witnessed an overall mixed market situation of Cyclohexane across Europe. Overall prices of Cyclohexane across Europe were recorded to have increased by more than 3% during this time frame. Upticks in the prices of Cyclohexane across Europe were primarily associated with inflation in the prices of feedstock Benzene which inflated by more than 44% during this time frame, thereby resulting in the increments in the production costs. Across the Eurozone, the construction sector also improved as evidenced by increments in the mortgage filing applications and the mandatory policy of possessing an EPB (Energy Performance Indoor Climate) certification as part of the policy introduced by the Belgian government in late 2023. Moreover, upcoming municipal elections across Belgium also provided adequate support to the prices of Cyclohexane as commercial construction improved. This gradually led to improvement in the demand from the downstream paints and coating industries. However, despite the demand side exhibiting a gradual recovery during the termination of this year, increased input costs in the construction sector continued to weigh on real estate firms with the outlook being primarily pessimistic for the rest of the year.
