15 February 2013 09:48 [Source: ICB]
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 6 February.
Initial offers by producers were heard at $2,550-2,600/tonne CFR NE Asia, in a bid to restore margins resulted squeezed by 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.
At midday on 6 February, 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 on poor demand.
A key Asian capro producer, Ube Industries, announced on 5 February its intention to cease production at its 100,000 tonne/year capro facility in Sakai in 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.
Capro is an intermediate product primarily used in the production of nylon 6 fibres, plastics and other polymeric materials.
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