Europe May capro firms €10/tonne after April drop

21 May 2008 23:59  [Source: ICIS news]

LONDON (ICIS news)--The May caprolactam contract was agreed at an average increase of €10/tonne ($15/tonne) from April on the back of higher benzene costs, producers and consumer confirmed on Wednesday.

“My average is between a benzene formula and a rollover so I think an increase of €10/tonne is a fair representation,” a large consumer said, putting the pre-discounted May capro contract settled in a range of €1,944-1,985/tonne FD (free delivered) NWE (northwest Europe).

“An increase of €10/tonne is fair,” another consumer said.

Producers said that the full €19/tonne increase in the benzene contract was agreed for formula-related contracts. They also said that increases "averaged at €10/tonne".

The May benzene contract settled at €761/tonne (free on board) NWE (northwest Europe), up €19/tonne on April.

Another large producer quoted May increases of €15-20/tonne.

“It helped that Domo had the force majeure problem,” the producer said. “May demand has been healthy and in the upper range of possibilities,” the producer added.

These comments contradicted many heard on the buy-side.

“The market is long and I am hearing the manufacturers of textiles and carpets have reduced operations,” a large buyer said.

“OK there may be some short-term issues such as Domo, anyhow I didn’t need to look far for additional volumes."

A big concern for producers was the prospect of even higher benzene prices in June as well as the prospect of sulphur prices doubling in the second semester.

“It’s too early to say about June, its July that will be the hot topic as we are expecting a substantial increase in the second half of the year,” said a large consumer.

European sulphur prices have been far behind world levels but are expected to move closer in the second half of the year. Expectations are that sulphur prices will almost double due to short supply and reduced natural gas production.

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

($1 = €0.64)

For more on capro visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Julia Meehan
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly