06 September 2012 07:22 [Source: ICIS news]
SINGAPORE (ICIS)--Asia's September caprolactam (capro) contracts were settled up by about $80-90/tonne (€63-71/tonne) month on month as producers tried to recover shrinking margins on the back of firm upstream benzene costs, major buyers and sellers said on Thursday.
Contracts were said to have settled at $2,385-2,390/tonne CFR NE Asia in China, and at $2,380-2,385/tonne in Taiwan on a CFR (cost & freight) northeast (NE) Asia basis, they added.
August contracts were settled at $2,300/tonne CFR NE Asia, according to ICIS data.
As a result of the higher contract prices, there was a revival of buying interest in the spot market since late last week, market players said.
Spot prices are now deemed lower than contract prices and buyers are now keen to restock some spot cargoes, said traders
Selling notions of deep sea cargoes for end-September loading were above $2,350/tonne CFR China on Thursday, they added.
However, many sellers and traders said they are not keen to let go of cargoes at such prices, as they expect prices to increase further over the next few days.
A Japanese capro producer said that he stopped offering spot cargoes for the week, as netbacks is around $50/tonne lower compared with his current contract cargoes.
Going forward, capro producers said they will try to increase contract prices further, to recover losing margins.
"Our target for October contracts is at a minimum of $2,500/tonne CFR NE Asia," he added.
Asian capro spot prices were assessed at $20/tonne higher week on week at $2,310-2,340/tonne CFR NE Asia in the week ending 5 September, ICIS data showed.
Capro is an intermediate product that is primarily used in the production of nylon 6 fibres, plastics and other polymeric materials.
Additional reporting by Junie Lin
($1 = €0.79)
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