01 December 2010 23:59 [Source: ICIS news]
LONDON (ICIS)--The European November caprolactam contract price has increased by an average of €30/tonne ($41/tonne) on the back of higher feedstock benzene, ongoing tight supply and healthy demand in Europe and for export to Asia, producers and consumers said on Wednesday.
The November caprolactam pre-discounted contract price settled at €2,230-2,286/tonne FD (free delivered) NWE (northwest Europe).
“November has proved a difficult month and some discussions are still open but contracts will be up €36-37.5/tonne. My starting point was plus €50/tonne,” said one producer.
However, the producer added that for buyers who agreed early in November, when benzene spot prices were softer, increases of €20-30/tonne were applied to some contracts.
“I agreed a November contract at an increase of €30/tonne and hope to do this with all my suppliers,” one buyer said.
A second buyer also recognised an increase of €30/tonne as representative of its November caprolactam contracts.
“We moved up €20-30/tonne, so a little below the full benzene. We have found our availability in the market, it’s tight but [there is caprolactam availability] there. For December I am not expecting much change in supply or demand.”
A large buyer said it had closed some accounts at plus €36/tonne but was still in talks, while another said plus €30/tonne was more or less confirmed.
Another small consumer said: “I am still talking and I think €36/tonne increase is too high, we should at least get something back. Negotiations have taken much longer than is necessary and we still need to do some talking.”
One of the largest European buyers firmly disputed such an attempt, addressing price development in October when benzene fell by €36/tonne but the October caprolactam contract price rolled over.
The October caprolactam contract price settled at a pre-discounted €2,200-2,256/tonne FD NWE, despite benzene falling €36/tonne.
On Tuesday, the December benzene contract price settled up €27/tonne to €730/tonne FOB (free on board) NWE (northwest Europe) on the back of firmer crude values.
It was not clear how another increase in feedstock benzene would impact on December caprolactam contract price discussions. Despite demand from Asia remaining at a healthy level in December and moving into January, a number of Europe buyers said they would be taking fewer volumes ahead of year-end.
($1 = €0.77)
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