28 March 2011 03:40 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--Negotiations for March caprolactam (capro) in Europe will likely progress into April, with buy and sell ideas still far apart, a buyer said on the sidelines of the International Petrochemical Conference (IPC) on Sunday.
“The expectation is for sure below [an increase of] €100/tonne. To be honest, with some [producers] we are quite far away, with others not so far,” the buyer involved in the production of nylon (or polyamide) said.
Producers had earlier started with targets of an increase of €150-200/tonne ($211-282/tonne), but have since revised these downwards in light of a sharp drop in demand for polymers following the Japan disaster. Producers' targets, though, were still at a range of plus €100-170/tonne.
Despite this reduction in offtake and a rollover in the upstream March benzene contract, supply concerns allowed producers to remain bullish in their expectations for March capro agreements.
While acknowledging tightness in the market, the consumer said that margins for capro production were high and any increase in costs would need to be passed on further downstream as nylon margins had been squeezed considerably.
The delay in fixing March prices was unsettling market players in relation to the outcome of April negotiations. Consumers were looking to the April benzene contract settlement and hoping that April would reverse the trend in capro.
The gross February capro contract price was recorded at €2,542-2,598/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.
Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.
($1 = €0.71)
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