LONDON (ICIS)--The global cyclohexane (CX) market is balancing out after an extreme period of tightness on the back of oversupply in Asia and as the US recovers from Hurricane Harvey, according to sources this week.
The closure of SABIC’s Wilton 330,000 tonne/year facility in the UK removed a sizeable portion of CX from the market at the start of 2017, even though the plant was not running at full rates at its time of closure.
Thenceforward, European CX supply became more reliant on imports from the US, Asia and the Middle East.
This year, European CX supply remained perpetually tight, with some months shorter than others.
However, supply constraints in the second and third quarter as a result of planned and unplanned outages in the US and Middle East created a period of global tightness.
Supply shortages amid high demand led to a significant increase in the European third quarter contract delta price, which was agreed at €170/tonne, an increase of €27/tonne from the previous quarter.
By mid-August, global tightness had eased as production resumed in these regions and European players noted an increase in imports.
However, this was short lived as Hurricane Harvey hit the US Gulf Coast on 25 August, causing a number of CX plants had to shut down.
The impact on US production varied, with some plant outages lasting longer than others.
Shipments from the US were heavily delayed as a result, leaving the European market tight again.
Meanwhile, the Asian market stabilised and soon became long due to plentiful supply. The Asian CX market has since remained long.
The US market gradually recovered from the impact of Hurricane Harvey, and small volumes began reaching Europe around October, according to sources.
Stability has now returned to both the European and the US markets, the global CX market has become more balanced after a volatile year.
“CX supply is very good and spot seems to be available in the market, at least we get multiple offers from several regions, including Europe”, said one buyer.
“CX balance in the global market is rapidly changing”, said a trader, who added that one large US CX producer is focusing its exports on Europe.
Players' expectations for the first quarter of 2018 are optimistic at present. The improved supply and balanced market is expected to continue into the new year.
The majority of CX is used in nylon production, widely used in sectors like carpets, furniture, car tyres and airbags, engineering resins, sportswear, ropes and performance fibres, among others.
Focus article by Eashani Chavda
Pictured: Nylon-based fishing nets in a Bangladeshi shop
Source: Majority World/REX/Shutterstock