Asia capro spot prices unlikely to go above $3,700 in 2011- producer

25 March 2011 19:38  [Source: ICIS news]

XIAMEN (ICIS)--Asian caprolactam (capro) spot prices were unlikely to go beyond $3,700/tonne (€2,627/tonne) in 2011, as downstream nylon industries were unable to absorb the costs, said a China-based producer on Friday.

Fang Fang made her comments in Mandarin during 2011's CPL & PA Market Forum in Xiamen, China.

Fang is the company representative of Sinopec’s Baling Petrochemical, Caprolactam Division

“Current prices were hovering around $3,600/tonne CFR [cost and freight) China, is already very close to our anticipated $3,700/tonne highest price mark for this year,” she said. “We see little room for prices to go up any further, as downstream industries were increasingly finding it tough to pass on costs.”

A downstream Taiwan nylon chip (polyamide 6) maker echoed similar views.

“I understand capro producers had very poor margins for more than 10 years, and were doing better only since last year,” the downstream nylon chip maker said. “However, capro prices had been rising so fast that downstream nylon industries like us were unable to catch up at all.”

Another Taiwan-based nylon chip maker said, “Furthermore, June is the traditional demand lull for the nylon industry; there are really very few supporting factors [fundamentally] for spot capro prices to go much further.”

“However, supply is so tight now, volume is more important than prices’’ relating to potential shortfall in caprolactam supply amid Japan’s earthquake worries.

“Should Asian [caprolactam] supply [be] highly affected by this [Japan’s supply cut], then that is the only valid reason now for prices to go up further,’’ the second Taiwan-based nylon chip maker added.

The two-day conference last till 25 March.

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By: Junie Lin

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