Europe April caprolactam falls €30/tonne

02 May 2008 10:30  [Source: ICIS news]

LONDON (ICIS news)--The April Europe caprolactam contract has settled at a decrease of €30/tonne ($46/tonne) from March on lower demand, a major consumer confirmed on Friday.

“We closed at an average of €30/tonne down,” a major caprolactam buyer said. “The euro is high and demand is low, the market is suffering.”

The pre-discounted contract price settled in a €1,934-1,975/tonne ($2,975-3,038/tonne) FD (free delivered) NWE (northwest Europe). 

Another large producer also confirmed that it reduced April contracts by €30/tonne but said that ‘on a net basis caprolatam’ it had seen prices firm by €20/tonne over a two month period.

“We agreed to a €30/tonne reduction,” a large fibres manufacturer said.

The buyer said that, because of the cost of raw materials, it expected prices to come down again on a "weak polymer market".

Caprolactam producers had originally pushed for a rollover from March to April, citing healthy demand conditions and higher energy and production costs.

The direction of the benzene contract price, which was settled down €45/tonne in April, typically sets the scene for monthly caprolactam contract discussions.

Producers spoke about a balanced European market with demand as expected for the time of year, but some buyers painted a different picture.

“Our need will be reduced in May because we have a shutdown on nylon 6,” said a major nylon 6 producer. “Demand is not good and I am not expecting things to improve, I’m not optimistic for June,” the producer added.

Price intentions for May had not yet emerged following the May benzene contract which was agreed on Wednesday 30 April at €761/tonne, up €19/tonne from April.

A large producer was doubtful of a higher caprolactam price in May saying that the market was tired of price hikes.

Another supplier said that it would push for the full benzene increment because of stronger demand, particularly in Asia.

Buyers said that demand for nylon 6 was much weaker than expected in April and were concerned about the months ahead.

“Looking at the market we will ask for a reduction in May.  Prices will not go up for sure,” said the buyer.

Another buying source said that it would be taking less volume in May because of a planned outage at its fibre facility in Italy, describing the European caprolactam market as long.

A fibres producer said that it would have a shutdown in May and that it too would be consuming less caprolactam. The fibres producer said that it was expecting a weak May and was not optimistic about June.   

In the key Chinese market, it was reported that difficulty in securing credit lines continued to cap caprolactam buying interest, with many sellers and buyers adopting a wait-and-see approach in the current uncertain market climate.

A producer said that poor demand had also hit the polyester and rayon sectors.

European producers include BASF, DSM, LANXESS and Domo Caproleuna. Hosiery, knitted garments and a variety of threads and ropes are derived from caprolactam.

($1 = €0.65)

For more on caprolactam visit ICIS chemical intelligence

By: Julia Meehan
+44 20 8652 3214

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