SunSirs: The Fluctuation of Cyclohexanone Market in 2025 Still Exists

Let's take a look at how the cyclohexanone market will develop in 2025?

In terms of production capacity: In 2023, China's cyclohexanone production capacity was 9.82 million tons. In 2024, new production capacity of cyclohexanone in China continued to be released, with an annual increase of approximately 1.1 million tons. Among them, the 300,000 tons of cyclohexanone produced by Luxi Chemical and the 480,000 tons of cyclohexanone produced by Hubei Sanning were mainly used to support the downstream production of CPL units. Hubei Sanning's cyclohexanone production capacity plan was higher than its CPL production capacity plan, and it is expected that Hubei Sanning will not purchase cyclohexanone in the later stage. Hualu Hengsheng and Anhui Haoyuan are fully equipped downstream adipic acid plants. Only 100,000 tons of cyclohexanone from Xinjiang Putiansu has a commercial production capacity. In 2024, the total production capacity of cyclohexanone in China will reach 10.92 million tons.

Supply side: From the supply side, as a chemical intermediate, cyclohexanone had additional production capacity of cyclohexanone CPL or adipic acid in 2024. Although both was supporting facilities, according to the planning situation, Luxi Chemical's cyclohexanone CPL was fully equipped. Hubei Sanning's cyclohexanone production capacity plan was more than CPL. In theory, the new cyclohexanone production capacity was still greater than downstream supporting capacity. Therefore, it is expected that by 2025, the overall supply of cyclohexanone will continue to increase, and the market will inevitably face a situation of oversupply.

In terms of demand: It is expected that the downstream supporting equipment for cyclohexanone, CPL, will expand production by 2025, but some of the newly added capacity will be integrated with cyclohexanone production. Therefore, the increase in demand for cyclohexanone downstream outsourcing may narrow, and coupled with the significant expansion of downstream production capacity, the overall capacity growth rate will decrease in the future. Therefore, from the perspective of demand, although the demand for cyclohexanone will increase in 2025, the growth rate of demand will not be as fast as the growth rate of supply. Therefore, the game between supply and demand in the cyclohexanone market will continue in 2025.

Production situation: The annual capacity utilization rate of cyclohexanone in 2023 was 74.6%, with an annual output of approximately 6.4 million tons. In 2024, the production capacity of cyclohexanone was expanded, and the capacity utilization rate increased to 78.8%, an increase of 4 percentage points in capacity utilization rate. As a result, the output also increased. The cyclohexanone production in 2024 was about 7.66 million tons, an increase of 19.6% compared to 2023.

It is expected that the production of cyclohexanone will increase narrowly in 2025, with an overall increase smaller than in 2024. On the one hand, the production capacity of cyclohexanone will continue to be released in 2025, and the expansion of production capacity will drive an increase in market output. However, due to the significant contraction of profit in the cyclohexanone market in 2024, although the production capacity will increase in 2025, under the cost pressure of some factories, the actual capacity utilization rate of cyclohexanone may not have a significant increase. Therefore, it is expected that the production of cyclohexanone will only increase slightly in 2025.

Downstream consumption structure: The overall downstream consumption structure of cyclohexanone in China will not change significantly in 2024. CPL was still the main downstream product of cyclohexanone, accounting for about 64.37% of the demand. The second ranked product was adipic acid, accounting for about 25.87% of the demand. The proportion of other downstream products is relatively limited, with ortho phenylphenol accounting for 5% and paint and ink accounting for 4.39%.

Import volume situation: In 2018, the domestic import volume of cyclohexanone was 69,000 tons, which decreased to 93,000 tons in 2019. In recent years, with the continuous construction of domestic cyclohexanone facilities and the expansion of production capacity, the dependence on imported cyclohexanone has been decreasing year by year, and the import volume of cyclohexanone has dropped to around 100 tons. From January to November 2024, the import volume of cyclohexanone was only 196 tons. China has basically become a net exporter of cyclohexanone. It is expected that the import volume of cyclohexanone in China will continue to decrease by 2025, and the impact on the market will also be limited.

Export volume situation: From 2018 to 2024, China's cyclohexanone export volume has basically achieved year-on-year growth. From January to November 2024, China's cyclohexanone export volume was 73,400 tons, an increase of 37.8% compared to last year. It is expected that the export volume of cyclohexanone in China will continue to grow in the coming years. With the stable growth of China's cyclohexanone production capacity and supply side, the domestic cyclohexanone market was, already in a surplus situation. In addition, with the continuous innovation of domestic cyclohexanone production processes, the production cost of cyclohexanone may continue to decrease, making it more cost-effective in the international field. In 2024, Sumitomo Japan has shut down its 100000 ton cyclohexanone plant, and it is expected that the demand for cyclohexanone in some regions of Japan will be imported. Therefore, overall, there may be stable growth expectations for the future export volume of cyclohexanone in China.

Summary

Looking back at 2024, the market trend of cyclohexanone was closely related to raw material costs and supply and demand relationships. It is expected that by 2025, the overall spot supply of cyclohexanone market will still be abundant, with supply side pressure remaining, and the trend of raw material costs will be fluctuating at a high level. The operating rate of the downstream main demand CPL market was 50% to 30%l in 2024. While increasing production capacity, more attention should be paid to the operating situation of downstream products in 2025. The downstream chemical fiber market is mostly equipped with cyclohexanone equipment, and the solvent market has little demand for cyclohexanone. It is expected that the downstream chemical fiber and solvent fields will still mainly focus on essential procurement. Overall, by 2025, the supply and demand sides of the cyclohexanone market will be mostly in a fluctuating state, with the market operating mainly in a wide range of fluctuations.

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