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AdvanSix's Nylon Glut Deepens as Margins Stay Squeezed
AdvanSix shares have fallen since a May downgrade as nylon supply gluts and weak pricing offset cost cuts. With benzene costs high and demand soft, the near-term outlook remains challenged.
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AdvanSix shares have underperformed since a May downgrade, as a supply glut in the nylon market and elevated raw material costs continue to pressure margins, the analyst who cut the rating said.
The company, a producer of nylon 6 resin and caprolactam, faces a persistent imbalance between supply and demand. Weak pricing for nylon and related products has eroded profitability, while benzene costs remain high, the analyst wrote on Seeking Alpha.
The downgrade to Hold reflected expectations of a prolonged downturn in the chemical cycle. Since then, the stock has moved lower, validating the cautious stance, the analyst said.