02 June 2003 00:00 [Source: ICB]European caprolactam producers are voicing their disappointment about prices and margins as they admit they were not able to achieve the full increases posted for quarter two.
'We are disappointed because we were looking for a substantial increase that was meant to repair the damage caused by feedstock pressure during quarter one', one major producer told ECN.
Against posted increases originally as high as E240/tonne at a time when NWE benzene spot prices spiked, hitting an average value of $650/tonne fob NWE in mid/late March, producers had to backtrack and reduce their asking price to E150-200/tonne. They finally only managed to achieve E100-150/ tonne in fibres markets, bringing quarter two contract prices up to around E1300-1350/tonne FD NWE.
Benzene contracts however were up by E70/tonne in quarter two settling at E525/tonne FD, keeping the pressure on caprolactam margins. However, the slide in benzene spot prices contributed to reduce the support for caprolactam producers.
'Prices and margins suffered during quarter one and are still under severe pressure, while volumes have remained fairly stable', a market source noted.
There were also no immediate benefits on spot prices into China as 'Sars has exacerbated an already serious trend towards destocking in China and South East Asia', one producer said.
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