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Insight | Time: Jun 21 2018 2:52PM
CPL market influenced by nylon 6 CS chip market
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Nylon markets were in familiar condition again at present. Nylon 6 CS chip market slumped rapidly, and downstream plants stood on the sidelines. Some chip plants began to reduce production to keep prices and to avoid inventory accumulation. After such condition appearing again and again, chip plants were more experienced and reduced production earlier and earlier. CPL market also began to decline, similar as the market in Mar and Apr. In fact, there had been such market in the second half of 2017.

It was not the first time that nylon 6 CS chip market was seen as the major factor influencing CPL market. Although CPL and nylon 6 CS chip markets were influenced by each other, but at first it was nylon 6 CS chip market that affected CPL market. But why did nylon 6 CS chip slip or rise? It was because of absolute prices.

For “by cash, ex-works” prices, buyers purchased when nylon 6 CS chip prices slipped to 15,000yuan/mt, and when prices rose to 18,000yuan/mt, buyers stood on the sidelines. Additionally, CPL prices and downstream demand were taken into consideration moderately.

The whole nylon markets were influenced by slips or increases of nylon 6 CS chip market. At first, inventory of chip plants accumulated, and then chip plants reduced production. Then CPL supply lengthened, and CPL prices fell. It did not matter when CPL prices dropped to 14,000yuan/mt or even 13,500yuan/mt, but as long as nylon 6 CS chip prices decreased to 15,000yuan/mt, buyers would purchase for large lot. As a result, prices would rebound rapidly with increase of 1,000yuan/mt within only two or three days. When prices rallied to 17,500yuan/mt, buyers would stop purchasing.

Staple fiber and fishing net plants as well as traders all did so. Such operation influenced spot CPL market, and then contract CPL market, contract nylon 6 HS chip market, or even downstream markets.

*Note: HS- high-speed spinning
   CS- conventional spinning
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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