In 2026, the domestic caprolactam market followed a fluctuating upward trend, driven by rising upstream raw material costs, geopolitical disruptions, low industry operating rates, and a persistent supply-demand imbalance.

From January to August, the average spot price of caprolactam in East China reached RMB 11,526.98/ton, approximately 20% higher year on year. By early September, prices had climbed above RMB 14,000/ton, with the East China spot market currently around RMB 14,300/ton.

Caprolactam Prices Show Strong Upward Momentum

The caprolactam market remained relatively firm with some volatility during January and February. Following production cuts that began in November 2025, supply conditions gradually tightened, providing support for a recovery in prices.

In early March, escalating tensions between the US and Iran triggered a sharp one-day increase in crude oil and pure benzene prices. Caprolactam prices responded accordingly and moved higher throughout March.

Prices reached a peak of approximately RMB 13,500/ton in early April. However, the market subsequently weakened as downstream demand failed to keep pace with high raw material costs. Improving geopolitical conditions in the Middle East also reduced cost-side support, pushing caprolactam prices down to around RMB 10,900/ton by early July.

The market then entered another upward phase. Rising feedstock costs, expectations of increased maintenance shutdowns, and tightening supply helped prices recover. By early September, caprolactam prices had exceeded RMB 14,000/ton, with the market maintaining a strong upward bias.

Pure Benzene Costs Remain a Key Price Driver

Pure benzene is one of the most important upstream raw materials for caprolactam production, making its price trend a major factor influencing production costs.

From March onward, pure benzene prices experienced significant fluctuations as repeated geopolitical developments in the Middle East affected crude oil and commodity markets. After entering April, speculation gradually became more rational, and price volatility narrowed as the market consolidated at relatively high levels.

In May and June, easing tensions in the Middle East, combined with production cuts and maintenance shutdowns in downstream industries, weakened market expectations and pushed pure benzene prices lower.

However, prices rebounded in July and August. Concentrated maintenance at domestic pure benzene plants and low port inventories tightened the market and provided fresh upward momentum. By early September, Sinopec had raised its listed pure benzene price to RMB 9,900/ton.

The elevated pure benzene price continues to place considerable cost pressure on caprolactam producers.

Rising Sulfur Prices Add Further Cost Pressure

Sulfur prices also provided strong cost-side support for the caprolactam market in 2026.

International sulfur prices continued to rise amid geopolitical instability in the Middle East and disruptions to shipping through key international waterways. Against a backdrop of tightening supply and declining import and port inventories, domestic spot sulfur prices maintained a strong upward trend and repeatedly reached historical highs.

Since June, China's three major oil companies have prioritized domestic sulfur supplies for phosphate fertilizer production, reducing the volume available to the chemical sector. This further tightened market availability and pushed prices higher.

Sulfur prices at Zhenjiang Port reached approximately RMB 11,750/ton before experiencing some correction during July and August.

Low Operating Rates Keep Caprolactam Supply Tight

Supply-side constraints have been another major factor supporting caprolactam prices.

Throughout 2026, caprolactam producers generally operated at only 70–80% capacity utilization, keeping overall market supply relatively tight. From January to August, the cumulative supply-demand gap was estimated at approximately 80,000 tons.

For much of the year, demand exceeded available supply, creating a favorable environment for higher caprolactam prices. Although some production capacity returned to the market, overall operating rates remained relatively low, and supply continued to provide strong support to prices.

Caprolactam Market Outlook

In the short term, the caprolactam market is expected to remain strong.

Pure benzene prices remain elevated, while Sinopec's listed price continues to provide significant cost support. As a result, caprolactam producers may continue to raise their offers to reflect higher upstream costs.

On the supply side, the restart of the Luxi Phase III project has provided some relief. However, the maintenance shutdown of the Lunan Petrochemical unit and the delayed restart of the Yangmei Taihua plant mean that overall market supply remains relatively tight.

Therefore, caprolactam prices are expected to maintain strong upward momentum in the near term.

Nevertheless, the medium- to long-term outlook remains subject to considerable uncertainty. Geopolitical developments in the Middle East could continue to cause significant fluctuations in crude oil and pure benzene prices. At the same time, sustained increases in feedstock costs are placing greater financial pressure on downstream PA6 chip and spinning producers.

As downstream companies become more cautious about purchasing high-priced raw materials, demand-side resistance may gradually increase. With the Mid-Autumn Festival and National Day holidays approaching, downstream operating activity and purchasing capacity could also weaken, potentially limiting the upside of the caprolactam market.

Overall, caprolactam prices are likely to remain firm in the short term, supported by high upstream costs and tight supply, while high prices and weaker downstream purchasing power could create greater resistance to further gains in the medium term.