Europe April nylon 6,6 contracts at rollover to €0.05/kg rise

01 May 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European nylon 6,6 April contract prices have settled at a rollover to an increase of €0.05/kg ($0.07/kg), depending on starting point and feedstock, sources said on Tuesday.

Nylon 6,6 can be manufactured using butadiene (BD) via adiponitrile (ADN), or by using adipic acid (ADA).

European BD April contract prices settled at an increase of €90/tonne. The April Benzene contract – which is upstream of adipic acid – fell by €37/tonne.

This meant that nylon 6,6 producers using the BD route needed to increase April contract prices to avoid losing margins.

Producers manufacturing via the adipic acid route that started negotiations at the low end of March’s price range also sought to raise prices in order to recover margins lost since the beginning of the year.

Nevertheless, weakening downstream demand prevented contract prices from increasing at the top end of the range.

May BD contract prices have subsequently fallen by €25/tonne, but feedstock costs remain high and nylon 6,6 margins low.

Rising feedstock costs have pushed nylon 6,6 contract prices 11-13% higher compared with the December 2011 contract price.

Demand for nylon 6,6 (or polyamide 6,6) is weakening because of deteriorating macroeconomic conditions, which have reduced consumer purchasing power. This has lowered downstream textile and automotive demand.

Asian automotive consumption is also weakening, limiting exports of finished goods from Europe. Mid and small-sized car demand is low. However, premium vehicle sales remain unaffected. Although over 50% of German finished cars are exported to Asia, the majority of this is for premium automotives.

Automotive demand is weakest in southern Europe, where macroeconomic conditions are poorest.

As a result, some spot nylon 6,6 material is being sold at up to €0.45/kg below contract, at a price of €2.50/kg FD (free delivered) NWE (northwest Europe) for virgin polymer. This is predominantly being offered by traders which are looking to reduce their stock positions.

April nylon 6,6 virgin polymer contracts settled at €2.90-2.95/kg FD NWE.

($1 = €0.76)


By: Mark Victory
+44 208 652 3214



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