29 February 2012 23:59 [Source: ICIS news]
The February benzene contract price rose by €114–119/tonne.
February capro contracts settled at €2,180–2,250/tonne FD (free delivered) NWE (northwest
Producers had been targeting a price increase of €150/tonne to regain margins lost in the fourth quarter of 2011 against benzene.
Buyers had been aiming for increases below €100/tonne because of weak demand in January and early February and in order to restore margins on downstream nylon 6 (or polyamide 6).
In the past six months, capro contract prices have fallen by 3–4%. In the same period, the benzene contract price has increased by 11%.
Capro demand had been low in January and early February because of weak macroeconomic conditions.
But a spate of pre-buying in the second half of February, coupled with rising end-use automotive consumption and restocking, have increased demand.
Consumers have been pre-buying material ahead of a capro outage at major producer DSM in March, which is expected to tighten the market.
The company will carry out a turnaround at its 250,000 tonne/year capro plant at Geleen, in the
And other producers have also experienced minor technical problems, reducing stocks.
There have also been unconfirmed reports of shortages of cyclohexanone-cyclohexanol mixture, known as KA oil, and other intermediates used in capro production, which will further limit availability in March.
Consumers have been stockpiling material to cover potential shortages.
In addition, prices are expected to increase in March to recover margins against benzene. Firm price targets are yet to be set.
Capro inventories were reduced in the fourth quarter of 2011, to lower working capital. Low stockpiles have led to restocking in February.
High automotive demand is being driven by strong buying interest in
Capro is the precursor to nylon 6, a widely used synthetic polymer.
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