03 December 2008 16:40 [Source: ICIS news]
LONDON (ICIS news)--The unexpected drop of €131/tonne ($166/tonne) in the value of the December benzene contract would do little to attract any buying interest in the downstream nylon 6 market, nylon 6 producers and consumers said on Wednesday.
“There is hardly any demand because of the automotive industry. It’s a terrible situation. December is over,” said the producer.
“In times when raw material prices drop dramatically, we do not see this automatically in the nylon market,” said the producer.
“There is just no point dropping prices by the full benzene reduction because there is no demand. It’s meaningless,” the producer concluded.
The December benzene contract settled on 28 November at €185/tonne FOB (free on board) NWE (northwest ?xml:namespace>
Nylon sources said that they were not expecting such a big fall in the value of benzene following November’s dramatic drop of €481/tonne.
Marking a definition of a “true” market price was difficult, said another producer.
“Demand is depressed and really low, so to define a market price is really difficult,” said the producer, who confirmed that it was running its production at 50%.
European nylon production was said to be running at 50% in some cases, while in others the figure was put at 30-40%.
It was also said that production was at zero on some lines and would remain so for the rest of December.
Further upstream in the caprolactam market, a major producer said that it refused to “give another €131/tonne away”.
The producer believed that volume was no longer related to price, as many of its customers were already closed.
($1 = €0.79)
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