19 November 2008 23:59 [Source: ICIS news]
LONDON (ICIS news)--The European November caprolactam contract price settled at a staggering reduction of €481/tonne, producers and consumers confirmed on Wednesday.
“All or most of the benzene cost was passed on to our customers,” a major caprolactam producer confirmed.
November caprolactam contracts were agreed at a pre-discounted range of €1,423-1,464/tonne ($1,801-1,853/tonne) FD (free delivered) NWE (northwest ?xml:namespace>
This is down €481/tonne from October, according to global chemical market intelligence service ICIS pricing.
Other sellers acknowledged that the full benzene drop was passed on to customers.
“We agreed on the benzene drop,” commented the producer, while another said that it “gave the full benzene away”.
Major consumers also verified that the November caprolactam contract dropped by an unprecedented €481/tonne.
“We settled with the benzene,” a major buyer and producer of nylon 6 confirmed. The source added that it was going to cut (caprolactam) volumes in November and December because “the outlook was so bad”.
Another nylon 6 manufacturer, who expected to see caprolactam prices drop by more than €481/tonne, described a very bleak picture of the market.
“Demand is just so poor and we are running operations at 50%. [Caprolactam] stocks are building and we will have to do something drastic,” he said.
“It’s a huge crisis,” commented a producer. “We should not overestimate the speed at which people have reduced volume.”
News of the caprolactam contract settlement followed BASF’s announcement on Wednesday that it was issuing a reduced full-year profits outlook, temporarily shutting down 80 petrochemical plants and reducing production at about 100 plants worldwide in an attempt to avoid overcapacity.
One of the largest caprolactam consumers in
“In terms of operations, we are just following demand and will continue to so next month,” said the consumer.
($1 = €0.79)
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