Cyclohexane Price Dynamics: Hazira Soars While GSFC Slashes Rates

Key Highlights:

1. Price Movements: Cyclohexane prices increased by ₹2 per kg, with variations among traders and domestic manufacturers, creating a mixed market trend.
2. Supply Dynamics: India produces nearly 115,000–118,000 tons monthly, meeting most of its demand. Import activity is limited due to uncompetitive replacement costs.
3. Demand Factors: Stable demand for Nylon 6 and pharmaceutical raw materials keeps the market steady, but reduced benzene blending weakens sentiment.
4. Global Market Influences: Rising crude oil prices (+0.36%) and lower naphtha (-$3) and benzene (-$2) prices contribute to market uncertainties.

Cyclohexane Prices Rise Amid Mixed Market Sentiments

• In the Indian market, the price of Cyclohexane has risen by ₹2 per kg today, reaching ₹93++ per kg (Ex-Hazira) with a 60-day credit term.
• In contrast, the domestic manufacturer GSFC has reduced its Cyclohexane price recently by ₹2.50 per kg, now priced at ₹89.50++ per kg (Ex-Vadodara, Gujarat) under the same credit terms.
• Traders are quoting mixed prices in the range of ₹92-93++ per kg or higher, with 30-day credit terms.
• In the retail market, prices for Cyclohexane in barrel packs have also increased by ₹2 per kg, now standing at ₹102 per kg or higher in Hazira and ₹103 per kg in Vadodara, both with a 30-day credit term.

Domestic Production Supports Stable Demand for Nylon 6

• India’s demand for Cyclohexane is approximately 10,000 tons per month, equivalent to 120,000 tons annually. Two domestic manufacturers, RIL Ltd. and GSFC, collectively produce around 115,000–118,000 tons of Cyclohexane monthly.
• The majority of Cyclohexane is utilized for in-house production of Adipic Acid and Hexamethylene Diamine, critical intermediates for Caprolactam and Nylon 6 manufacturing. 
• Additionally, Cyclohexane serves as a raw material for the pharmaceutical industry.
• The demand for Nylon 6, a downstream product, remains stable. Rising prices of crude oil, naphtha, and benzene are expected to lend support to Cyclohexane prices.
• However, a reduction in demand for benzene as a blending component has introduced some bearish sentiment in the market.
• Supply is constrained due to reduced imports in November and limited vessel arrivals in December, as domestic prices are more competitive compared to import costs. 
• Importers remain hesitant to procure at higher replacement costs, as noted by a prominent market participant.

Global Raw Material Trends Influence Pricing

• In the international market, WTI Crude Oil benchmark prices have risen by 0.36%, currently at $70.34 per barrel. 
• FOB Singapore Naphtha prices have decreased by $3, now at $605 per metric ton, while FOB Korea Benzene prices have declined by $2 to $902 per metric ton.
• Malaysia’s sulfuric acid imports rose over January-September. Sharp gains observed in inflows from Japan, South Korea, Australia the Philippines.
• China’s domestic nitrogen fertilizers market to remain under pressure on ample supply. Ammonia supply improves after factory restart from maintenance.

Expert Opinion: Mixed Trends Likely Amid Rising Costs

• Predicts that Cyclohexane prices may exhibit mixed trends due to uneven pricing strategies among traders and domestic manufacturers. With upstream raw material costs on the rise and limited supply, short-term support for Cyclohexane prices is anticipated.