China PA6 Market Hits Bottom and Rebounds Slightly

Cost Side: Upstream caprolactam had previously been trading at low levels; however, with processing losses prompting some facilities to minimize operating rates or undergo maintenance, tightened raw material supplies caused caprolactam prices to stabilize. This provided bottom support to PA6 production costs, efficiently eliminating the possibility of a significant decline. International crude oil prices fluctuated within a narrow range, and the energy sector exerted no significant bearish pressure on the raw material benzene, meaning costs no longer dragged down chip prices. Furthermore, following a deep correction in raw material prices earlier, losses to chip manufacturers have narrowed; the cost side now provides moderate upward support, laying the foundation to this week's slight rebound.

Supply and Demand Side: On the supply side, concentrated maintenance of caprolactam facilities led to a contraction in raw material supplies, while polymerization plant operating rates remained low. The volume of circulating market stock was limited, the pace of inventory destocking by manufacturers accelerated slightly, and the willingness of inventory holders to sell at low prices diminished. On the demand side, downstream modified plastic and fiber-spinning companies had previously maintained low raw material inventories; following the stabilization of prices, there was a concentrated emit of essential restocking demand. While end-user purchasing volumes saw a slight month-on-month increase and market trading activity improved compared to the beginning of the month, the sector's traditional off-season has not yet fully concluded. Consequently, downstream willingness to stockpile in bulk remains limited; the demand recovery is merely periodic and unlikely to drive a sustained, strong upward direction.

In the short term, PA6 prices are expected to fluctuate with a firm tone at low levels, retaining moderate upward momentum however lacking the possible to a sharp, continuous rally; the projected trading range is 11,700–12,100 RMB/tonne. A sustained strengthening of the market is determined by two key conditions: continued price increases to caprolactam and concentrated bulk restocking by downstream end-consumers. Should the raw material market weaken again, prices would likely revert to a pattern of narrow-range consolidation.