Asia's nylon chips offers fall on lower June capro contract prices

04 July 2012 09:43  [Source: ICIS news]

BRISBANE (ICIS)--Offers for Asian semi-dull nylon chip (polyamide) chips dropped by $100-150/tonne (€79-119/tonne) to $2,550-2,600/tonne CFR China this week following early settlements of the July caprolactam (capro) contracts, producers said on Wednesday.

Prices for Asian nylon chips were assessed at $30/tonne lower week on week at the low end of the range at $2,650-2,700/tonne CFR China in the week ended 3 July, according to ICIS data.

Nylon chip producers usually announce fresh nylon chips offers once they ascertain their feedstock costs. These producers typically require a $250-300/tonne spread between nylon chips and capro contract prices to break even.

July capro contracts were largely settled $170-180/tonne lower month on month at $2,230-2,250/tonne CFR (cost & freight) NE (northeast) Asia.

However, the persistently weak downstream demand from the yarn segment continued to limit discussions and most buyers adopted a wait-and-see stance while slowing down their procurement amid low consumption.

Nylon chips buyers in China are also likely to remain cautious in July and August amid the volatility in energy prices, according to producers.

As a result, Taiwanese nylon chips plants were operating at below 60% of capacity on average, down from 70% last month.

A major Taiwanese producer has reduced its operating rates to 30-40% of capacity from 60% in June, according to market sources.

Another major Taiwanese producer said it is currently reducing the operating rate of its plant from 90% of capacity in June to probably 60% by end-July.

Chinese domestic plants are maintaining their operating rates at 70-75% of capacity, industry sources said.

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

($1 = €0.79) 


By: Junie Lin



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