Caprolactam (CPL) supply in China increased rapidly as the average operation rate of CPL plants rebounded to a high level. CPL and nylon 6 CS chip markets began to dip from August 10. Nylon 6 HS chip and nylon 6 filament markets did not follow the downtrend, but prices are bound to decline later as downstream purchases reduce.

The average operation rate of CPL plants rebounded from 58 per cent to 70 per cent rapidly by end-July. Shandong Haili and Lubao’s units also restarted in August. Meanwhile, Nanjing Fibrant, Tianchen Yaolong and Risun’s units also recovered running at full capacity or at 90 per cent. As a result, the average operation rate increased to 84 per cent.

Besides, with expectations of a bearish market, downstream plants would only lower and not increase operation rates. Therefore, CPL supply may be in surplus while demand would stay weak, which is bound to suppress CPL prices.

Nylon 6 textile filament plants are behaving more cautiously at present. As a whole, CPL supply is large while downstream demand is weak, so nylon markets would keep slipping up short. But the turning point may come when downstream demand rebounds in the traditional peak season and feedstock prices reach the bottom line.