In the past month, a round of price increases for nylon 6 chips broke out in the Chinese market. The downstream is very defensive, and as the transmission mechanism is blocked, the upstream and downstream experience different conditions. At best, it can only be regarded as a structural market. The upstream rises happily, while the nylon 6 factory is in a difficult situation.
From February 1 to March 1, the data released by China Fiber Network showed that upstream such as pure benzene and caprolactam, midstream nylon 6 chips, downstream such as nylon 6 and fully drawn yarn (FDY) increased by 34.13%, 29.89%, 21.43% and 22.47%, the increase in the chips of the polymer nylon 6 is small, and more close to the upstream, the greater the increase.
From the perspective of profitability, the price difference of upstream caprolactam has hit a new high in 19 months since May 2019, reaching 7,700 yuan/ton, the monthly increase reached 1,450 yuan/ton, and the profit increased by 22.95%. The price difference between nylon 6 chips and FDY has increased by 100 yuan/ton, but the price difference between nylon 6 chips and caprolactam has dropped by 150 yuan/ton, and the loss has increased by 18.75%.
For the nylon 6 industry in China, this round of rising prices was triggered by the slowdown in the global epidemic and the increase in prices caused by excessive currency. However, in terms of the price transmission mechanism, especially in terms of industry bargaining, the upstream caprolactam factories are too strong, and the polynylon 6 factory is in an extremely unfavorable passive situation.
Over the years, many caprolactam plants have directly invested in new polymerization production lines. The downstream polymerization nylon 6 plants cannot compete with them in terms of production costs, and their living space has been severely squeezed. More extreme, some companies are fighting a price war, the phenomena that the price of chips is close to or even lower than caprolactam can be frequently seen.