[PA6 Daily Review] Raw Material Bull-Bear Tug-Of-War Stalemate, Chips Market Narrowly Consolidates

1. Today's Summary

On the feedstock side, bullish and bearish factors are intertwined: Sinopec’s weekly settlement price for caprolactam was raised by RMB 350/ton, providing support, while domestic refineries uniformly lowered pure benzene prices by RMB 300/ton, intensifying the tug-of-war on the cost side.

2. Today, domestic PA6 chip prices across all grades remained fully stable, with no obvious fluctuations on the market, as the market entered a stalemate consolidation phase.

3. The industry remains in a loss-making অবস্থা, with both conventional spinning and high-speed spinning chips still operating at a loss, though the margin of loss has improved at the margin; downstream end-users maintain a strong wait-and-see attitude, replenishing mainly for immediate needs, and market trading remains weak.

International oil prices have sharply declined, dragging down the overall sentiment in the chemical industry; however, the firmness of caprolactam spot prices provides support at the bottom of the market. In the short term, the market will continue to experience a tug-of-war between bulls and bears, resulting in a narrow range of fluctuations.

II. Spot Overview

(I) Spot prices remained stable across the board.

Today, the East China PA6 chip market quotation operated steadily, with no upward or downward adjustments in any specifications. Conventional spinning regular chips were quoted at RMB 11,700-11,850/ton for spot payment short-distance delivery; high-end spot payment ex-warehouse prices were RMB 11,900-12,100/ton. High-speed spinning regular spot payment ex-factory prices were RMB 11,900-12,100/ton, and premium acceptance delivery prices were RMB 12,200-12,400/ton. Overall, the price spread in the market remained stable.

Trading sentiment in the market is relatively weak. Downstream end-users are strongly in a wait-and-see mood, with limited willingness to replenish inventory in bulk. Market transactions are mainly driven by small lots for immediate needs. On the cost side, long and short factors are clearly offsetting each other: the settlement price increase of caprolactam provides support, while the decline in benzene prices drags down the cost center of raw materials. Market participants are operating cautiously, and the overall market is caught between gains and losses, showing a clear tug-of-war.

The trend of upstream raw materials shows divergence.

The trends in core raw materials are diverging, with varying levels of support. On the positive side, Sinopec's latest weekly pricing for caprolactam has increased by 350 yuan/ton to 11,900 yuan/ton, with the spot market remaining stable at 11,500 yuan/ton for delivery, indicating solid cost support at the bottom. On the negative side, starting from June 15, domestic refineries in East, South, and Central China have uniformly lowered the price of benzene by 300 yuan/ton to 7,400 yuan/ton, dragging down the overall focus of upstream raw materials. Additionally, today's significant drop in international oil prices, following the release of geopolitical risks, has led to a weak sentiment in the chemical market, further intensifying the wait-and-see mood in the chip market.

(3) Market Conditions of Upstream and Downstream Supporting Industries

The spot caprolactam market remained temporarily stable with a wait-and-see sentiment. On the cost side, weakened by fluctuations in crude oil, the market showed a volatile downward trend; however, spot quotations stayed firm and did not follow the decline for the time being, providing effective support to downstream nylon chips. The downstream nylon filament market fluctuated, with mainstream POY quotations in Jiangsu, Zhejiang, and Fujian at RMB 13,500–14,600/ton. Market offers were high while actual transaction levels moved lower, with the transaction focus remaining at the lower end. Purchases were limited to rigid demand restocking, and the industry was operating on thin margins. End-use weaving orders showed no obvious recovery, making it difficult to drive a significant increase in demand for chips.

3. Production Updates

Today, the capacity utilization rate of China’s domestic PA6 industry remained at 62.90%, with operating rates of production units relatively stable and no concentrated maintenance shutdowns or output reductions. Profitability continued to be under pressure, and the industry remained deeply in a loss-making state overall. Among them, conventional spinning chips posted a loss of RMB 600/ton, while high-speed spinning chips posted a loss of RMB 375/ton. High-speed spinning showed relatively better profitability than conventional spinning.

Weekly data are expected to remain relatively stable but slightly weak. This week, capacity utilization and weekly output are expected to edge down slightly, indicating a marginal contraction in industry supply. Profits for conventional spinning have rebounded slightly, with losses narrowing, and manufacturers have limited willingness to sell off inventory at deep discounts. Corporate inventories continue to be destocked, providing slight support to futures prices.

IV. Price Forecast

Short-term market forecast

The short-term domestic PA6 chip market continues.Bull-bear tug-of-war, narrow-range consolidationThe trend shows insufficient momentum for a one-sided rise or fall.

Suppressing factors: The sharp decline in international oil prices has weakened overall sentiment in the chemical market; lower benzene prices have dragged down raw material costs, with easing expected in the upstream market; downstream nylon terminal demand is sluggish, spot demand follow-up is weak, transactions are difficult to expand, and the market lacks upward momentum.

Supporting factors: settlement prices for caprolactam have increased, spot prices remain firm, and cost support at the bottom is solid; industry losses have narrowed slightly, reinforcing producers’ willingness to hold prices firm; operating rates and output have edged down, while inventories continue to decline, easing supply pressure.

2. Regional and Specification Trends

Mainstream chip prices in East China remained stable within the range, with the price spread between conventional spinning and high-speed spinning unchanged. Overall, the market was mainly characterized by negotiations based on rigid demand and a wait-and-see, consolidating sentiment, with limited intraday fluctuations and no clear trending.

3. Risk Warning

If pure benzene and caprolactam experience concentrated fluctuations, it will break the current equilibrium of speculation and drive volatility in the chip market; if downstream weaving and nylon factories concentrate on replenishing inventory, increased transaction volume may slightly boost the market. This analysis is merely a fundamental forecast and does not constitute trading or investment advice.