Europe January caprolactam price rolls over

28 January 2009 23:59  [Source: ICIS news]

LONDON (ICIS news)--The European January caprolactam contract price has rolled over from December, producers and consumers confirmed on Wednesday.

January caprolactam contracts were agreed at a pre-discounted range of €1,292-1,333/tonne ($1,700-1,754/tonne) FD (free delivered) NWE (northwest Europe), according to global chemical market intelligence service ICIS pricing.

“We have settled at a rollover from December and have seen some stabilisation in the market,” said a major producer.

“In February, I expect demand to be at the same level as it was in the second half of January, and then for it to pick up in March following the Chinese New Year,” the producer said.

Although a rollover was widely confirmed in the European caprolactam market, there was talk of slight reductions based on the €25/tonne drop in the cyclohexane (CX) first-quarter contract delta and the €5/tonne drop in the value of the January benzene contract.

“I think it’s in the best interest for everybody to see a rollover on the contract...There are some rollovers and decreases based on the CX delta and benzene, but the market still remains very depressed,” said a buyer.

Another major buyer of caprolactam for the polymers market also confirmed that its January contracts largely rolled over from December levels.

“We have suspended our old formulas, so you can say on average our contracts rolled over,” said the buyer.

The major buyer described volumes in January to be “at a very low level” and, in some cases, “worse than December”.

“It’s looking worse for February and we (the company) don’t see any improvement,” the major buyer said, while also confirming that its polymerisation production was running below 40% and that its spinning activities were “close to zero”.

Despite the potential for an increase in the benzene contract price for February, which is a primary benchmark for caprolactam, producers and consumers of caprolactam confirmed that there had been no evidence of pre-buying ahead of a higher benzene contract price.

“People need cash and can’t take risks. Stocks need to be turned into cash,” said a European manufacturer of granules, fibres, yarns and technical textiles.

($1 = €0.76)

For more on benzene, cyclohexane and caprolactam visit ICIS chemical intelligence
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By: Julia Meehan
+44 20 8652 3214

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