21 April 2010 17:39 [Source: ICIS news]
LONDON (ICIS news)--The European caprolactam market is expected to tighten further in May and June because of tight supply and good demand, market sources said on Wednesday.
“I can get the volumes I need for April but I am not sure about May and June,” commented a major caprolactam buyer.
“In May and June we will see shutdowns and textile demand will be high for summer. Orders are already coming in for winter,” the buyer added.
Another buyer of caprolactam said that it had been forced to reduce one of its downstream nylon 6 lines in April because it could not secure enough raw materials.
“We can’t get all [the caprolactam] we need so we have shut one line,” the buyer said. As well as availability issues, the buyer was concerned about price developments upstream and downstream.
Caprolactam producers have targeted more than the April benzene increase of €142/tonne ($192/tonne) because of availability issues and the need to recover lost margin, but this will further squeeze margins in the nylon 6 market, polymer producers said.
Their original targets for April were increases of €200/tonne from March, but as the month has progressed producers deemed increments of €160-170/tonne as more realistic and achievable.
“Based on raw materials we are at plus €165-170/tonne in the second phase [of April contract negotiations],” a major producer confirmed.
Buyers expected to close April contracts at increases of €155-165/tonne but continued to voice concerns about passing successive increases on to the nylon 6 market.
“I see [plus] €160/tonne as the maximum. It is difficult to pass the increases on because ?xml:namespace>
Meanwhile, many sources saw strong demand from
Demand has been very strong from
DSM was scheduled to have a four-week shutdown at its 250,000 tonne/year Geleen facility in the
In Asia this week, prices moved to record high due to strong demand from key downstream market - China’s nylon textile industry.
Caprolactam spot prices in the northeast Asian region jumped to a range of $2,640-2,690/tonne CFR (cost and freight) this week, up another $50-60/tonne from the previous week, market sources said.
“Nylon production in
($1 = €0.74)
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