Radici places Novara nylon 6,6 plant on allocation

15 September 2009 12:38  [Source: ICIS news]

LONDON (ICIS news)--Radici Group has placed its 90,000 tonne/year nylon 6,6 plant at Novara, Italy, on allocation due to a “big shortage” in Europe and increased demand, a company source said on Tuesday.

The plant had been on allocation since the end of August due to the combination of low inventory levels, which were cut back due to weak demand earlier in the year; market consolidation during 2009 and improving demand, the source said.

Radici expects the nylon 6,6 plant to remain on allocation until the end of the year, the source said.

The source said it could not confirm the percentage of contractual volumes that would be delivered to customers, as this was dependent on the average size of orders and the length of time an individual buyer has been a customer of the company.

“For our bigger customers and our long-term relationships, we will try to deliver close to 100% [of contractual volumes]. But some of our smaller customers might not receive any material at all,” said the source.

The source estimated that Europe’s nylon 6,6 capacity had fallen by 250,000 tonnes/year since the start of 2009 due to weak demand and low margins in the market.

European nylon 6,6 consumption has been improving throughout August and September, according to market sources, driven by a recovery in the automotive industry.

As a result of the tight supply and strengthening demand, producers said they were targeting increases of up to €200/tonne ($294/tonne) in fourth-quarter contract prices.

($1 = €0.68)

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By: Mark Victory
+44 208 652 3214

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