Market trend
From July 15th to 20th, the domestic PA66 market price remained stable at 18200 yuan/ton. On July 21st, spot prices slightly rose, and the overall trend showed a bottom stabilization and a slight upward trend in the late trading session. From the perspective of the Business Social Average indicator, on July 15th, there was a signal that the 10 day moving average had crossed the 20 day moving average, and the technical trend officially turned from the previous continuous downward trend; The annual price is in the mid to low range of the year, with a significant drop of 6900 yuan from the high point of 25100 yuan/ton this year, and the bottom support is gradually emerging.
influencing factors
Cost side: The repair pace of the upstream adiponitrile supply side has slowed down, and domestic large factories have maintained a tight balance of raw materials during equipment maintenance. The arrival of adiponitrile from external sources is limited, and the raw material quotation has stopped falling and stabilized, stopping the previous downward trend of PA66 cost drag.
The supporting raw material caprolactam continued to increase during the week, and the settlement price of caprolactam by Sinopec increased month on month in the third week of July. Chemical raw materials such as pure benzene and cyclohexanone also fluctuated and strengthened, and the raw material cost of the entire nylon industry chain rose at the bottom, forming rigid cost support for PA66. The loss space of manufacturers narrowed, and the willingness to actively reduce prices and ship significantly weakened.
Domestic PA66 polymerization factories are operating at a low level, and some enterprises are operating at low loads due to sustained losses in the early stage. The increase in the circulation of spot goods in the industry is limited, and costs are stabilizing combined with supply contraction, resulting in a loss of sustained downward momentum in spot prices.
Supply side
The industry continues to operate at a low rate, and the pressure on factory inventory has significantly eased after several months of destocking. There are not many available sources of goods in the market; The low-level selling operations of traders in the early stage have basically ended, and the mentality of holding goods to support prices has increased, resulting in the gradual disappearance of low-priced sources of goods. Overlaying the moving average, there is a bullish crossover signal, and the market sentiment is gradually heating up. At the end of the trading session, spot prices showed a slight upward trend.
Demand side
Downstream modification and injection molding enterprises are in the pre stocking cycle of autumn and winter fabrics and auto parts. Compared with the off-season in June, the demand for essential purchases has rebounded, and low-end essential orders have been steadily released, providing a bottom line for spot transactions.
The overall recovery of domestic textile and injection molding terminals is weak, with limited increase in overseas orders. Downstream enterprises maintain a small batch replenishment mode according to demand, and there is insufficient willingness to stock up in large quantities. The demand side only moderately repairs, making it difficult to drive prices to soar significantly.
In the first half of the year, a large amount of low-priced imported cotton yarn continued to impact the domestic weaving industry, putting pressure on the profits of downstream nylon fabric processing factories. The acceptance of high priced PA66 raw materials was low, and the significant upward space was limited by terminal demand.
Future forecast
It is expected that the PA66 market will be prone to rise but difficult to fall in the short term, and the overall pattern of low-level oscillation and strong tendency will be maintained. The cost side raw material support is stable, and the industry’s low operating and low inventory pattern continues. Coupled with the establishment of a bullish signal on the technical moving average, the price has a bottom rebound foundation; However, the recovery of downstream demand at the terminal is limited, and the market lacks sustained driving force for a sharp rise. The upward trend is moderate, and the upper pressure level refers to the range of 18800-19200 yuan/ton. If the upstream adiponitrile and caprolactam continue to strengthen, coupled with the concentrated release of downstream stock, the price is expected to explore the upper edge of the range; If the terminal procurement continues to be sluggish, the price will mainly fluctuate within a narrow range of 17600-18600 yuan/ton.
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