06 February 2013 06:46 [Source: ICIS news]
BRISBANE (ICIS)--February caprolactam (capro) contracts in Asia were concluded largely at $2,530/tonne (€1,872/tonne) CFR (cost & freight) northeast (NE) Asia, $50-80/tonne higher compared with January, key buyers and sellers said on Wednesday.
Initial offers by producers were heard at $2,550-2,600/tonne CFR NE Asia, in a bid to restore the squeezed margins resulted from the increase in upstream benzene prices.
January capro contracts in Asia were finalised at $2,450-2,480/tonne CFR NE Asia, according to ICIS.
Capro is an intermediate product that is primarily used in the production of nylon 6 fibres, plastics and other polymeric materials.
At midday, benzene prices were at $1,398-1,410/tonne FOB (free on board) Korea.
Most producers are battling with poor margins because of high benzene costs, increased competition from new capro capacities in China and ailing downstream demand on the back of the weak macroeconomic conditions.
Many producers globally have reduced their plants’ operating rates or extended their turnarounds because of poor demand.
One of the key capro producers in Asia, Ube Industries, announced on its website on 5 February that it intends to cease production at its 100,000 tonne/year capro facility in Sakai in late March 2014 because of poor profitability.
Other derivatives plants to cease production include a 200,000 tonne/year ammonia unit, 99,000 tonne/year liquefied carbon dioxide unit, 160,000 tonne/year ammonium sulphate unit and 5,000 tonne/year 1,6-hexanediol unit.
($1 = €0.74)
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