23 February 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--The European February caprolactam contact price has increased by an average of €130/tonne ($178/tonne) from January, driven by rising benzene costs, strong demand, tight supply and higher prices in Asia, buyers and sellers confirmed on Wednesday.
The February pre-discounted contract price settled at €2,542-2,598/tonne FD (free delivered) NWE (northwest Europe). It marks the fourth consecutive monthly price increase.
The January caprolactam contract price rose by €155/tonne from December, in line with benzene, which settled up by €149/tonne from the previous month as a result of an increase in the first-quarter cyclohexane (CX) delta contract. This was due to tight supply and strong demand globally.
Regarding the February caprolactam contract price, a producer said: “I can confirm that we increased our contract price by an average of €130/tonne. At the moment the market is still very tight and Asia continues to firm.”
A second producer said its contract for February was agreed at an average increase of €135/tonne. “Because of the market environment, we settled a little above benzene, at €135/tonne,” the producer said.
Other European producers were seeking increases of €160-170/tonne for February volumes, based on a combination of higher feedstock costs, tight supply, strong demand and the strength of caprolactam prices in Asia.
In Asia, ICIS assessed caprolactam spot prices this week at $3,560/tonne CFR (cost and freight) China, equivalent to €2,599/tonne CFR China.
Although February contracts were still under discussion in Europe, those that had been closed were at increases of €130/tonne from the previous month.
“I have not finished everything yet but it looks like an increase of €130/tonne. I tried to get [the price] down but couldn’t. All my suppliers were referring to UBE’s force majeure, but I am not impacted by this,” said a buyer.
UBE Chemical Europe this week declared force majeure on supplies of caprolactam due to a technical problem at its plant in ?xml:namespace>
Another buyer said: “I can confirm plus €130/tonne [for February caprolactam], although I heard plus €150/tonne elsewhere. Some people wanted more than benzene and one party was trying to take advantage of the UBE situation. But this is not fair for caprolactam buyers to be sandwiched in-between.”
The European caprolactam market is already tight because of strong demand and the need for exports to Asia, which has been exacerbated by UBE's force majeure.
One of UBE’s customers said: “The price of caprolactam is my last concern. Obtaining molecules and trying alternative sources is proving very difficult in the short term because the market is very tight. Everybody supplied by UBE is in trouble at the moment,” the buyer said.
($1 = €0.73)
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