Europe October nylon 6 and 6,6 contracts settle at a rollover

30 October 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European nylon 6 and nylon 6,6 October contracts have settled at a rollover from September as high feedstock costs and weak demand have counterbalanced each other, sources said on Tuesday.

Consumption is low because of reduced consumer purchasing power caused by poor macroeconomic conditions. The downstream carpet and non-premium automotives sectors have been the most severely affected.

The downturn in consumption has been sharpened by a tightening of fiscal policy in China, which has reduced European exports of finished automotives and textiles.

Raw material costs remain high. Firm spot prices for benzene compared with the October contract price are causing concern throughout the market. Margins throughout the polyamide chain are already squeezed and November is typically a low month for consumption because of year-end destocking.

Market players are concerned that because of low consumption it will not be possible to pass any increase in costs through the polyamide chain, resulting in further squeezed margins.

Nylon 6 is manufactured using caprolactam (capro) as a feedstock, which is downstream of benzene. Nylon 6,6 can be manufactured using either adipic acid (ADA), which is downstream of benzene, or adiponitrile via butadiene (BD).

Although BD costs are falling, taking the market as a whole, this has been outweighed by high benzene prices, sources said.

Nylon (or polyamide) 6 virgin polymer October contract prices settled at €2.15-2.32/kg ($2.76-2.97/kg) FD (free delivered) NWE (northwest Europe). Europe nylon 6,6 virgin polymer October contract prices finalised at €2.70-2.78/kg FD NWE.

($1 = €0.78)

By: Mark Victory
+44 208 652 3214

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