Asia January capro contract talks hit snag on wide buy-sell gap

09 January 2013 09:15  [Source: ICIS news]

BRISBANE (ICIS)--Negotiations for January caprolactam contracts in Asia could extend up to next week amid an average $150/tonne (€114/tonne) gap in pricing ideas being quoted by buyers and sellers, market sources said on Wednesday.

Producers’ offers were heard at $2,550-2,600/tonne CFR (cost and freight) NE (northeast) Asia, up by $200-250/tonne compared with December's contract settlement.

December contract prices were settled at $2,330-2,360/tonne CFR NE Asia, down by $40-50/tonne from November, with majority of contracts concluded at $2,350/tonne CFR NE Asia, according to ICIS.

A major Japanese producer offered January capro at $2,600/tonne CFR NE Asia, while other major producers were quoting $2,550/tonne CFR NE Asia, market sources said.

Key buyers, on the other hand, are not willing to commit to such high numbers, on concerns that they might not be able to pass on the higher costs to the downstream nylon chips market.

Capro is an intermediate product that is primarily used in the production of nylon 6 fibres, plastics and other polymeric materials.

At least two major buyers said their buying ideas for January capro were capped largely at $2,400/tonne CFR NE Asia, while a large northeast Asian buyer’s bid to a major producer was heard at $2,450/tonne CFR NE Asia, but this could not be confirmed.

Sellers said they could not accept anything below $2,500/tonne CFR NE Asia.

Most capro producers said they are being forced to hike prices to mitigate losses stemming from high cost of feedstock benzene.

At midday, benzene prices were at $1,410-1,420/tonne FOB (free on board) Korea. On 28 December last year, benzene traded at an all-time high of $1,480-1,495 FOB Korea because of tight spot availability.

($1 = €0.76)

By: Junie Lin

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