[PA66 Daily Review] Oil Prices Weaken, Demand Remains Sluggish, Market Operates in a Weak Stalemate

1. Today's Summary

1. Expectations for US-Iran talks have risen, geopolitical supply concerns have eased, and both domestic and international oil prices have dropped significantly, leading to a weakening overall chemical cost atmosphere.

 

2. The domestic PA66 capacity utilization rate is 56%, downstream buyers are resistant to purchasing at high prices, the supply-demand game is intensifying, and inventory pressure on manufacturers continues to build.

 

Invista HMD will implement a contract price of 26,300 yuan/ton starting from June 1. High-end raw materials are forming a bottom support, and the price of adipic acid has slightly increased today.

II. Spot Overview

The average price of industrial and plastic-grade chips nationwide was lowered by RMB 250 to RMB 18,750/ton, while spot prices for small-lot orders in Yuyao remained unchanged. The mainstream negotiated market range was RMB 18,000–19,500/ton. As feedstock prices weakened, some producers cut prices to move cargo and reduce inventories. Downstream end-user demand remained sluggish, traders operated cautiously, and high-priced cargo saw weak. Actual transactions in the market were limited to sporadic rigid demand, with overall offers fluctuating downward.

III. Production Dynamics

Industry operating rates remain at a relatively low 56%, and while there are expectations of long-term supply contraction, no significant near-term concentrated capacity cuts are occurring. Inventories are gradually accumulating, putting pressure on the market. Corporate margins are hovering near the cost line, and bullish and bearish factors in the feedstock market are offsetting each other. Producers lack strong motivation to dump cargoes at steep losses, leading to a tug-of-war between supporting prices and making shipments. Weekly data show that capacity utilization and output remain stable, with no significant fluctuations.

IV. Related Products

The market for adipic acid in East China is strengthening, with acceptance prices at 7,850-8,050 yuan/ton. Suppliers have raised their guidance prices to stabilize the market, while intermediaries are following up with their offers. Downstream demand is limited to small transactions based on immediate needs, resulting in limited transaction volume.

V. Price Forecast

HMD maintenance is underpinning the supply of hexamethylenediamine, but downstream demand remains weak. Market supply is ample, and market participants’ confidence is relatively low. Considering both costs and supply-demand fundamentals, the PA66 market is expected to remain in a weak and stagnant pattern in the short term, with limited room for price increases or decreases.

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