Lower June capro contract offers fails to attract Asian buyers

06 June 2012 07:38  [Source: ICIS news]

BRISBANE (ICIS)--Asia’s June caprolactam (capro) contract offers at $2,530-2,580/tonne (€2,024-2,064/tonne), down by $50-90/tonne from May settlements, have failed to move negotiations forward because of a wide buy-sell gap, market sources said on Wednesday.

May settlements were at $2,620-2,630/tonne, down by $130-140/tonne from April. The prices are on a cost and freight (CFR) northeast (NE) Asia basis.

Most buyers said it is difficult to move negotiations forward, as the difference between spot and contract prices is more than $200/tonne.

Asian capro spot prices have fallen by more than 20% since 15 February, when prices were trading at $2,950-3,000/tonne CFR China, as a result of weak consumption and concerns over softening global demand.

Asian capro spot prices fell this week by more than $50/tonne week on week to the $2,300s/tonne CFR China, because of tumbling upstream Asian benzene prices that hit a six-month low on 4 June.

Sellers said they are willing to compromise and settle at lower prices as buyers were understandably bearish.

However, the sellers said they are not keen to slash their selling ideas to the current spot prices, as that will mean selling at way below their production costs, suggesting huge margin losses.

Capro is an intermediate primarily used in the production of nylon 6 (or polyamide 6) fibres, plastics and other polymeric materials.

($1 = €0.80)

By: Junie Lin

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