FocusHigh offers for Asia nylon 6 chips to keep October demand soft

22 September 2010 07:37  [Source: ICIS news]

By Junie Lin

Ropes are among the downstream applications of nylon-6 chips.SINGAPORE (ICIS)--Demand for nylon 6 textile-grade chips in Asia may not strongly pick up in October, when peak manufacturing season in the region traditionally kicks in, as their current high prices discourage buyers from procuring supply, industry sources said on Wednesday.

Offers for nylon 6 chips were being quoted at $2,850–2,900/tonne (€2,138-2,175/tonne) CFR (cost & freight) China, while spot prices were last assessed at $2,780–2,820/tonne CFR China in the week ending 21 September, up 5.7-7.5% from early-August due to spikes in costs of feedstock caprolactam, based on ICIS data.

“The hope of a true-blue peak season is quite bleak now,” said a regional nylon 6 producer in Mandarin.

Nylon 6 is widely used in the manufacture of hosiery, knitted garments, threads, ropes, filaments, nets and tyre cords.

Earlier expectations that demand would strengthen next month, particularly from downstream nylon and tyre cord sectors, were quashed as buying interest had been very weak, industry sources said.

The long holidays in China were also affecting trading activities, with major buyers were staying in the sidelines, market sources said.

The country, which is the world's largest consumer of nylon 6 chips, is observing its Mid-Autumn Festival this week and will celebrate its week-long National Day holidays in the first week of October.

Only a few thousand tonnes of nylon chips were sold to China from Taiwan at $2,830–2,850/tonne CFR China this month, market players said.

Meanwhile, demand was further being hindered by lower production rates in the downstream nylon yarn sector in ZhejiangChina’s textile industry hub – due to prolonged energy restrictions set by the Chinese government, market sources said.

The mandated power curbs in selected Chinese provinces, which were due to end on 13 September, had been extended to December in the government’s hope to meet its self-imposed carbon emissions targets.

Major nylon chips producers in northeast Asia include Li Peng Enterprise, Zig Sheng Industrial Co and Guangdong Xinhui Meida Nylon Co.

($1 = €0.75)

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By: Junie Lin

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