Europe July caprolactam contract up €131/tonne on benzene hike

22 July 2009 23:59  [Source: ICIS news]

LONDON (ICIS news)--European July caprolactam contracts have settled at an increase of €131/tonne ($187/tonne) because of firming benzene, producers and consumers said on Wednesday.

“I am close to closing all my contracts at an average increase of €131/tonne,” confirmed a major European buyer. “I also closed a contract at an increase of €135/tonne. Discussions were hard and it took a long time because producers wanted to improve margins,” the buyer added.

Another buyer said: “There is no problem with supply but we paid the full benzene [increase].” The source added that its demand for August was “looking good” and that it had no problems securing material.

On the selling side, a major producer described the market as “quite balanced but globally short” and because of this was able to pass through the full benzene increase of €131/tonne downstream.

A second producer said: “We settled at the full benzene [increase] last month and again this month… we are very tight and have been forced to buy to meet our commitments.”

The June caprolactam contract settled at a pre-discounted price of €1,568-1,624/tonne FD (free delivered) NWE (northwest Europe), according to global chemical market intelligence service ICIS pricing.

The July benzene contract settled at €656/tonne free on board (FOB) northwest Europe (NWE), up €131/tonne.

A third producer was surprised that its competitors had only achieved an increase of €131/tonne for July contracts. “I concluded partially everything at [an increase of] €136-150/tonne and our volumes are good, very good,” the producer said.

Major European caprolactam producers include BASF, Domo Caproleuna, Lanxess and DSM.

($1 = €0.70)

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

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