Europe September caprolactam falls €30/tonne

01 October 2008 23:59  [Source: ICIS news]

LONDON (ICIS news)--European September caprolactam contracts have been settled €30/tonne ($42/tonne) lower than last month, although reductions of over €50/tonne were also agreed, on falling demand, consumers said on Wednesday.

  

“During September we have seen oil prices and benzene fall and for freely negotiated contracts we got slightly more than €50/tonne but we rolled at one account because we rolled in August,” a major Europe producer confirmed.

 

“We have decreased our purchasing and will be taking less volume in October because we are expecting a tough economic climate,” added the producer.

 

The September caprolactam contracts were agreed at a pre-discounted €2,014-2,055/tonne ($2,837-2,894/tonne) FD (free delivered) NWE (northwest Europe) range, down €30/tonne from August, according to global chemical market intelligence service ICIS pricing.

 

Another large European consumer said September contracts were agreed at decreases of €29-40/tonne for “freely negotiated business”.

 

“The problem for me is that I am buying caprolactam to change to polymer and I just can’t sell it, demand has just disappeared,” it added.

 

Price developments in the benzene and cyclohexane markets typically determine the direction of caprolactam but high stock levels and a drop in demand also influence movements.

 

As a result of the downturn in demand for caprolactam applications, Domo Caproleuna said that it had reduced its capacity at Leuna by 20% because of a 20% drop in demand for nylon 6.

 

“This is the first time in 19 years that we have had to reduce capacity,” said a company spokesperson.  

 

BASF also said this week it was running its European caprolactam facilities at reduced rates.

 

“We are running at 75% utilisation rates based on poor economics,” the BASF source said.

 

It was reported in the market this week the Ukrainian producer Cherkassy Azot would temporarily close its caprolactam plant as of 1 October on unfavourable production economics.

 

The European caprolactam contract settlement follows news on the Asian contract which settled down $180-225/tonne to $2,350-2,400/tonne CFR (cost and freight) NEA (northeast Asia) because of weak market fundamentals.

 

Caprolactam is an intermediate primarily used in the production of nylon 6 fibres and resins. Just over 70% of caprolactam is consumed in the production of nylon fibres with the rest used in engineering resins and films.

 

For more on benzene, cyclohexane and caprolactam visit ICIS chemical intelligence

To discuss issues facing the chemicals industry visit ICIS connect

 

 

By: Julia Meehan
+44 20 8652 3214

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