Asahi Kasei hikes July ACN nominations by 2%

20 June 2006 07:25  [Source: ICIS news]

SINGAPORE (ICIS news)--Asahi Kasei Chemicals, the Japanese major, has raised July acrylonitrile (ACN) contract nominations by 2% due to rising feedstock costs, a company official said on Tuesday.

“Feedstock propylene costs and high upstream naphtha values have severely eroded our margins. Our production costs, as a result, have risen sharply and we have no choice but to increase our July nominations,” the source added.

The July nomination was $1,630/tonne CFR Asia, $30/tonne higher than in June.

Propylene supply tightened in the US after April following an outage at Huntsman’s cracker in Texas. As a result, chemical grade propylene prices in the US for June were settled three cents/pound higher than in May at 51 cents/pound, while June ACN spot prices were $100/tonne higher than in May at $1,550-1,555/tonne FOB US Gulf.

Asian propylene spot prices have held firm at $1,050-1,080/tonne CFR Northeast Asia in the past month, while naphtha spot prices have hovered at $600-620/tonne CFR Japan for most of 2006 and pushed production costs up for Japanese petrochemical firms.

Acrylic fibre (AF) producers, who are major ACN end-users, are likely to resist the price increase. Negotiations over June contracts are still in a deadlock due to a hefty jump in prices for this month.

Spot ACN prices were at $1,490-1,560/tonne CFR Asia on Tuesday, up $70-100/tonne from a month ago.

By: Helen Yan
+65 6780 4359

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