30 August 1999 00:00 [Source: ACN]
Caprolactam producers in Japan have successfully pushed through a US$150/tonne price hike in Q3 contract prices. Q3 term prices now stand at US$1150/tonne cfr Asia in markets where negotiations have been concluded. A Thai producer also claimed he has achieved the same price hike.
A sharp rise in raw material costs has prompted producers to look for a compensating hike in caprolactam prices. Tight availability and strong demand has so far helped caprolactam producers.
New capacity growth has also been limited. A Japanese producer said that the DSM-Nanjing Chemicals joint venture in China with a capacity of 50 000 tonne/year is likely to start commercial operations in Q4 1999. There has also been no significant increase in imports from outside Asia. A few buyers said they were importing from Russia and eastern Europe at around US$1050/tonne cfr Northeast Asia, but limited availability prevented them from increasing volumes. Caprolactam producers are still unhappy with the current price level. A Japanese producer said average prices had fallen from US$1500-1550/tonne cfr Asia in 1997 to US$950/tonne cfr Asia in Q1 1999. Prices have recovered since then, but producers said rising raw material costs have prevented significant improvement in margins.
Caprolactam producers were optimistic about pushing through another price increase in Q4 because of high operating rates at nylon plants.
However, this may not be too easy. Producers in South Korea have yet to conclude Q3 negotiations, while Taiwanese producers have so far only managed to convince a few buyers to accept the price hike.
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