For the first time, China's exports of caprolactam exceeded imports

Affected by the energy crisis, the cost of chemicals in China and Europe has diverged significantly, and the cost and price of many European chemicals are significantly higher than in China, which has brought opportunities for export energy arbitrage for Chinese chemicals, and caprolactam (CPL) and PA6 are no exception
.

As can be seen from the trend of caprolactam import and export, in July 2022, the historical moment is ushered in, caprolactam exports exceed imports for the first time, and with the continued high energy costs in Europe and the withdrawal of some Japanese devices, it is expected that caprolactam exports will gradually increase
in the later period.

The COVID-19 pandemic, supply chain disruptions, and energy crises over the past three years have brought three supply shocks
to the global economy.

On September 21, 2022, in Yunxi District, Yueyang City, Baling Petrochemical Company was in full swing
for the relocation and upgrading of the caprolactam industry chain with an annual output of 600,000 tons.

The China Chemical Caprolactam project was transferred to production operations

On September 19, 2022, in response to investors' questions, China Chemical said: As of now, caprolactam projects, silicon-based aerogel projects, PBAT projects, adiponitrile projects, etc.

Caprolactam Project:

Fujian Tianchen Yaolong New Materials Co.

Tianchen Yaolong Phase I invested about 4.

Foreign markets are optimistic about domestic markets

Entering September, the domestic caprolactam market is running strongly, the demand support is obvious, and the seller's willingness to hold up the price is strong
.

Sakmi, a large Italian machinery and equipment company, said that the rise in energy prices has stopped some companies from production, reducing the competitiveness of European manufacturing, and at the moment when energy prices are rising, the prices of some products have risen by 30%.

European manufacturing companies have been benefiting from low-priced energy before, but the outbreak of the European energy crisis has caused the prices of crude oil, natural gas and coal to soar, which has greatly increased the production costs of enterprises, the price of European chemicals has also risen, and the price gap between Chinese and European chemical products has gradually widened
.

Since the Russian-Ukrainian conflict, the price difference between Russian oil and non-Russian oil has been rising, and although it has fallen with the central bank's interest rate hike, it is difficult to return to the pre-war price level
.

According to the data, the energy cost gap between China and Germany is expanding, so in contrast, China's industrial chain system is complete, the demand market is large, and the energy has energy cost advantages and stability advantages, which also proves that China's chemical industry is expected to undertake more European capacity transfer, is expected to usher in development opportunities, and the global relative advantages of manufacturing should be revalued
.

Under the "double killing" of supply and demand, the giants are targeting the Chinese market

European energy crisis, superimposed on the impact of the global epidemic, led to a huge impact on the global supply chain, many European companies were forced to start reducing production and stop production, raw materials either increased prices or stopped production and supply, market demand is getting less and less, in the supply break and demand sharply reduced under the double "suppression", there have been many chemical giants "shift position" to accelerate investment
in China.

The first is the European chemical giant BASF, the previously mentioned chemical giant BASF's optimism about the Chinese market also shows the huge growth potential of the Chinese market, BASF currently has 28 major wholly-owned subsidiaries, 7 major joint ventures, and 24 sales offices
in China.

There is also a production base at Covestro that has recently obtained the ISCC PLUS quality balance authoritative certification at its Shenzhen base
.
The Shenzhen site, which focuses on thermoplastic polyurethane (TPU) production, has achieved this certification means that it has the ability to provide customers with a share of the quality balance aromatic TPU with a share of renewable raw materials in large quantities, and to help the customer industry move further towards
the circular economy by providing low-carbon footprint products.
This can also be seen as a China-based move by Covestro to enhance the supply capacity of TPUs
.

There are also giants that are "quietly" put into production in China