Nov caprolactam contracts settled $250/mt lower
09 November 2005 04:18 [Source: ICIS news]
By Anu Agarwal
SINGAPORE (ICIS news)--Asian caprolactam contracts for November have been settled over 10% lower than in October on falling feedstock benzene and crude oil prices, and poor downstream demand, buyers and suppliers said on Wednesday.
Several November contracts have been fixed at $1,850-1,880/tonne CFR Northeast Asia (NEA), a sharp drop of $250/tonne from the October settlement of $2,100/tonne CFR NEA. Spot prices have fallen nearly $350-400/tonne from early October to $1,750-1,800/tonne CFR NEA.
Benzene values have dropped from around $800/tonne in early February to around $650/tonne on weak demand from key downstream sectors such as styrene monomer (SM), while crude prices have fallen to below $60/bbl on rising inventories.
The fall in caprolactam values was also triggered by high inventories across China, given the high import volumes in August and September, said several traders. A subsequent weakening in demand of downstream nylon chips has meant that end user demand for caprolactam has diminished significantly in November, they added.
“The outlook for caprolactam prices in the run up to end-2005 remains bearish,” a major caprolactam trader told ICIS news.
Several buyers said that the price correction in the nylon chain was long overdue, given that high prices of caprolactam and nylon chips had made nylon fabrics uncompetitive vis a vis alternative fibres like polyester.
High caprolactam and nylon prices earlier in 2005 encouraged downstream users to switch to fibres such as polyester, and the lower prices could help draw them back, added the sources.
By: Anu Agarwal
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