Europe March nylon 6 contracts up €0.10-0.13/kg on supply, demand

22 March 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European nylon 6 (or polyamide 6) March contracts settled at an increase of €0.10–0.13/kg ($0.14–0.19/kg) from February, due to strong demand and tight supply, sources said on Tuesday.

Virgin polymer nylon 6 March contract prices settled at €2.44–2.58/kg FD (free delivered) NWE (northwest Europe). Prices were reported as low as €2.30/kg, but this was not seen as reflective by the bulk of the market.

Low availability was the result of difficulties in sourcing feedstock caprolactam, coupled with strong demand, players said.

High consumption was predominantly coming from the textiles and automotives downstream markets.

Strong textiles buying interest was the result of cotton crop shortages which were fuelling demand for synthetic substitutes such as nylon 6.

Firm automotive offtake was driven by high Asian demand on the back of GDP growth and upwards social mobility in China. European car manufacturers were shipping high volumes of finished goods - thought to be above 50% of production at some German car manufacturers - to Asia because of strong regional demand.

However the crisis in Japan, which has heavily impacted automotive vehicle and parts manufacturers in the country, has begun to impact on European car production. European car manufacturers are largely reliant on automotive parts sourced from Japan.

Several European car manufacturers such as Renault and Volvo have warned that component shortages resulting from the Japanese disaster could lead to major disruption in production.

Nylon players said that they had already begun to see short working weeks implemented at European car plants because of a lack of materials, with more expected to follow.

Nylon 6 players were still trying to asses the impact of the Japanese crisis on the automotive market.

($1 = €0.70)

For more on nylon visit ICIS chemical intelligence

By: Mark Victory
+44 208 652 3214

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