Europe Oct nylon 6 gains €0.05/kg at top end on feedstock costs

19 October 2010 23:59  [Source: ICIS news]

LONDON (ICIS)--European nylon 6 (polyamide 6) contracts in October have settled up from the previous month at an increase of €0.05/kg ($0.07/kg) at the top end of the range because of higher feedstock costs, buyers and sellers confirmed on Tuesday.

Virgin polymer nylon 6 contracts settled at €2.05-2.15/kg FD (free delivered) NWE (northwest Europe), according to market players.

Nylon 6 demand remained strong as a result of export activity to Asia and improving macroeconomic conditions in Europe, sources said.

One producer said that it had already begun to receive orders for November, which was an encouraging sign.

“We’ve received November orders without prices – it’s too early for that – but it’s a sign that customers have good demand and want to ensure supply,” said the producer.

Nevertheless, a minority of market players saw signs of weakening consumption due to the end of peak season demand. It was these sources that reported October prices at the bottom end of the range, which rolled over from September prices.

Nylon 6 supply remained tight because of difficulties in sourcing the feedstock caprolactam, players confirmed. Sources that reported weakening demand said that this had improved nylon 6, but there remained no material available beyond contracted volumes.

“There’s a shortage of caprolactam. Producers are no longer following [further up the chain to] benzene, as caprolactam is very short and it has a big influence on polyamide 6,” said a producer.

Nylon 6 producers reiterated the need to recover margins lost during the economic downturn of 2008-2009, with price rises in 2010 being absorbed by cost increases in upstream markets.

“Margins have remained low from 2009,” said a nylon 6 compounder.

It remained too early to forecast November prices, which would depend on the supply/demand balance, sources said.

September virgin polymer nylon 6 contracts settled at €2.05-2.10/kg FD NWE.

($1 = €0.71)

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By: Mark Victory
+44 208 652 3214

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