1、 Analysis of PA66 market trend in the past week
| Gamma-PGA (gamma polyglutamic acid) |
In the past week, the domestic PA66 market has shown an overall trend of weak and stagnant trading after a slight rise, with a narrow range of price fluctuations. The market core presents a game pattern of “cost support and weak supply and demand”, and the overall market trading atmosphere is flat, with no significant unilateral rise or fall.
（1） Cost side: Weakened marginal support, bottom support still exists
This week, the overall cost of PA66 raw materials remained stable but slightly weak, and the support for spot prices has fallen slightly, but there has been no significant collapse, forming a rigid bottom support. In terms of core raw materials, after a significant increase in the price of adipic acid in the early stage, it has continued to experience a narrow downward trend recently, with a considerable cumulative decline, directly alleviating the cost pressure on the PA66 production end; At the same time, the newly added production capacity of hexamethylenediamine in China has been smoothly put into operation, and the incremental supply of hexamethylenediamine in the market has been released. The tight situation of raw material supply has been completely alleviated, and the price of hexamethylenediamine has remained stable with a slight downward trend, further weakening the cost support logic of PA66. However, the price premium formed on the energy side since the beginning of the year has not completely dissipated, and the overall cost baseline of the industry is in a relatively stable range, with limited room for significant decline, eliminating the possibility of a deep drop in PA66 prices. The overall cost side presents the characteristics of “weak support and difficult to fall”.
（2） Supply and demand side: loose and controllable supply, sustained sluggish demand
On the supply side, the operating rate of domestic PA66 production enterprises remained stable this week, and the overall supply of goods in the industry was sufficient. The pressure on manufacturers’ inventory was moderate and accumulated. The early equipment maintenance has affected the basic digestion, coupled with sufficient raw material supply, stable production rhythm of the enterprise, abundant spot goods in the market, normal circulation of conventional goods by traders, and some low-priced goods impacting the market, suppressing the high price market.
The demand side is the core factor contributing to the weak market this week. Downstream modification, injection molding, textile, and tire matching terminal industries still have obvious resistance to the current PA66 price, and high prices suppress terminal procurement enthusiasm. Downstream enterprises generally continue the conservative procurement strategy of “small orders are just needed, and purchases are made as needed”, resulting in sparse market transactions for large orders and overall sluggish trading. The operating load of the terminal industry remains low without centralized replenishment actions, and the demand side is unable to effectively stimulate the market, resulting in a weak overall supply-demand pattern of loose supply and weak demand.
2、 Future forecast
In the short term, the domestic PA66 market is likely to continue its trend of high and narrow fluctuations, with a slight downward shift in the center of gravity. The overall situation is dominated by a weak stalemate, and significant fluctuations are unlikely to occur. In terms of cost, there is currently no expectation of significant fluctuations in raw materials such as hexamethylenediamine and adipic acid. The stable bottom support of costs will limit the extent of market decline; However, the shortcomings on the supply and demand side are difficult to quickly repair, and the weak downstream demand situation is difficult to reverse in the short term, resulting in significant resistance to high price transactions in the market. The overall market will continue to be in a game state of cost bottoming out and demand suppression, with a high probability of maintaining a weak pattern of having value but no market, and adjusting to a short-term core operating rhythm of oscillation.
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