Honeywell confirms FM on US caprolactam at Virginia plant

07 December 2010 22:56  [Source: ICIS news]

HOUSTON (ICIS)--US producer Honeywell on Tuesday confirmed that it declared force majeure (FM) on caprolactam (capro) last week after the unplanned shutdown of its 375,000 tonne/year Hopewell plant in Virginia.

Honeywell supplies the nylon 6 feedstock to customers in the US and other markets, including large volumes to Asia.

“We are experiencing some production issues at our Hopewell facility, and the [plant] is currently down,” Honeywell spokesman Peter Dalpe said. For competitive reasons, he added, “we are not divulging the cause or the likely duration”.

In late November 2009, the Hopewell plant was shut down briefly after Tropical Storm Ida damaged some infrastructure at the site.

The current outage will exacerbate already tight domestic supplies of caprolactam, buyers said, so a quick return to production was crucial.

“It’s going to hit us,” a source said. “We buy some from them, and I’m sure they’re already behind on some orders. If the plant comes back up today or tomorrow, it might be OK,” the buyer said. “But if it’s two weeks from now, that’s going to be a problem.”

Another source noted that the new constraints were likely to provide additional support for December capro price-hike initiatives of 5 cents/lb ($110/tonne, €83/tonne).

Although a small nylon 6 producer said it had already accepted a 2-3 cent/lb gain for December capro, a large buyer said most capro contracts were not likely to be settled until January.

“We just don’t have the time left in 2010 to get it done,” the nylon producer said.

However, another buyer said tight capro had made new price increases inevitable even before the outage.

“The capro-to-nylon 6 margins remain thin,” he said. “The price of polymer has gone up, but not as quickly as capro.”

Other US producers of nylon 6 include BASF and Custom Resins.

($1 = €0.75)

For more on Honeywell, visit ICIS company intelligence
For more on caprolactam, visit ICIS chemical intelligence
To discuss issues facing the chemical industry, go to ICIS connect

By: Larry Terry
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