Europe nylon settles at rollovers or increases

25 April 2007 14:21  [Source: ICIS news]

LONDON (ICIS news)--European nylon virgin polymer (VP) April and second quarter contract prices were largely settled this week, with most now agreed between a rollover and increases up to €50/tonne ($68/tonne) from March levels, buyers and sellers said on Tuesday.

 

Nylon 6 producers reported contract increases for April of €15-30/tonne, although target price hikes had initially been at €50/tonne.

 

Buyers in the yarns business reported rollovers for nylon 6 contract business. April business in the compounding sector was also reported as a rollover by producers.

 

April nylon 6 VP prices were assessed in a €1,910-1,960/tonne FD (free delivered) NWE (northwest Europe) range, according to global chemical market intelligence service ICIS pricing.

 

For nylon 6,6 a major European producer reported quarter two price increases of up to €30/tonne, although it acknowledged some sales were made at rollovers, hence an average increase of €15/tonne.

 

Agreements of rollovers for monthly contract nylon 6,6 business were confirmed by buyers this week, while compounders reported rollovers to marginal decreases.

 

Looking forward into May, one major nylon 6 manufacturer was nervous regarding forthcoming demand, as customers were looking to fully utilise existing stocks before going back to the market.

 

Slow demand in the textiles sector had been expected, said the producer, but of more concern was a lack of demand in the compounding sector.

 

An explanation for this reduction in demand could not be pinpointed by the producer, although it speculated that buyers were expecting producers to attempt price increases in May on the back of likely increases in feedstock costs, especially benzene, and were attempting to stay out of the market for as long as possible. 

 

Another major European producer said it would seek increases of €30-40/tonne in May for both nylon 6 and 6,6, citing increased costs of benzene and caprolactam as justification for the prospective hikes.

 

Buyers were more bearish, and reported little or no contact with producers for May as yet. One said that producers would normally be starting early in pointing to likely feedstock price increases, but had been silent so far.

 

Another buyer reported already having fixed some May business for nylon 6 at a rollover from April and would look to secure further volumes at this level.

 

A major Russian producer also reported placing its May nylon 6 allocation for Europe at lower prices than the established range, and argued that customer demand was driving price movements, and that increases in benzene feedstock were largely irrelevant if buyers were unwilling to pay higher numbers.

 

Nylon 6 VP is used in the production of nylon fibres for textiles, carpets and industrial yarns as well as the growing engineering plastics business. Nylon 6,6 is a general purpose extruded grade of nylon.

 

Major European nylon producers include Rhodia, Lanxess and BASF.

 

($1=€0.73)

 

By: Mike Nash
+44 20 8652 3214

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