27 December 2010 06:05 [Source: ICIS news]
By Junie Lin
Prices in the key Chinese market surged by more than 22% from January to record highs of $2,850-2,880/tonne (€2,166-2,189/tonne) CFR (cost & freight)
A slight weakening was possible, with market players expecting caprolactam to trade at just above $2,800/tonne (€2,128/tonne) in January, but the tight supply would keep the price falls minimal, according to buyers and sellers.
December Asian contract prices were also at record highs of $2,800/tonne
The spread between benzene and caprolactam values was at a high level of $1,200/tonne in January, and surged up to $1,900/tonne in May, according to ICIS.
Continued supply tightness expected in 2011 should further boost the margins for producers. A traditionally healthy benzene/caprolactam spread was about $1,200/tonne, market sources said.
Capro is an intermediate primarily used in the production of nylon 6 (or polyamide 6) fibres, plastics and other polymeric materials.
Producers estimated that the global demand for caprolactam would post an 8% growth to 4.32m tonnes in 2011, with more than 58% of demand coming from
Demand for caprolactam would be strongly supported by
“I can really begin to feel the supply is really going to [be] very tight next year ,” said one nylon maker in
Only two expansion projects were in the pipeline for 2011 – in
These companies were expected to add only 40,000 tonnes of caprolactam supply to the market, most of which are likely to be absorbed by their respective domestic markets, industry sources said.
Ube Industries will expand its 110,000 tonne/year capro unit at Rayong by 20,000 tonnes/year. The expansion has been delayed for more than a year.
The yen (Y) 3bn ($36m) unit was now scheduled to be completed in December 2011 and was expected to come on stream in January 2012.
CPDC also plans to raise the capacity of its plant at Xiaogang in
Other capacity expansions were not due to come on stream until after 2012, industry sources said.
Meanwhile, the bulk of new nylon capacity was expected to come on stream next year, which would boost the demand for caprolactam, they said.
Tight supply of feedstock caprolactam would pose operational challenges for the nylon industry, one major China-based nylon producer said.
Caprolactam supply in
($1 = €0.76, $1 = Y82.87)
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