Europe nylon 6 Dec contracts settle at rollover to €0.05/kg fall

08 January 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--December nylon 6 contracts finalised at a rollover to a decrease of €0.05/kg ($0.07/kg), in spite of an increase in the upstream benzene December contract price of €52/tonne, buyers and sellers said on Tuesday.

The failure to pass on upstream cost rises was attibuted to weak demand.

“The situation is [that] demand is very poor on [macro]economic conditions,” a nylon compounder said.

Nylon 6 December contract price falls of €0.05/kg were representative of the top-end of the range and dependant on starting point.

Low demand is the result of year-end destocking and poor macroeconomic conditions which have limited end-use purchasing power. Despite the start of the New Year, restocking is yet to occur. Many players are only returning to work this week, and many end-use manufacturers have been closed for the entire duration of the holiday period.

With  macroeconomic conditions remaining weak, many market players expect low consumption throughout the first quarter.

Attention in the nylon 6 market has now turned to January contract negotiations, with players concerned over further hikes in the benzene contract in January. The January benzene contract rose by €69/tonne.

Nylon 6 producers said that they will need to push through sharp increases for nylon 6 in January – although exact levels will depend on buying interest – to restore margins.

“I think we've reached the bottom with benzene going up - it's suicide. It's unsustainable,” a nylon 6 producer said.

Buyers, however, said that with downstream margins continuing to decline, they would need to limit any rise as much as possible.

“I'm afraid we'll have to pay something. I'm very much afraid as prices downstream are still in a descending mood. It's not a nice situation in January,” a nylon buyer said.

The virgin polymer nylon 6 December contract settled at €2.05-2.17/kg FD (free delivered) NWE (northwest Europe).

($1 = €0.76)


By: Mark Victory
+44 208 652 3214



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