Nylon 6 buyers, sellers fight to preserve margins

19 February 2013 18:06  [Source: ICIS news]

LONDON (ICIS)--European nylon 6 producers are targeting February contract price rises of €0.05-0.10/kg because of the need to restore margins, sources said on Tuesday.

The targeted price increases are despite a €113/tonne ($151/tonne) fall in the upstream February benzene contract price.

Buyers are aiming to limit price increases as much as possible because of the need to preserve their own margins. Several sources said that demand is too weak and the nylon 6 market too oversupplied to justify price rises in the first quarter, arguing that producers would not be able to push up prices until the second quarter – which is traditionally the beginning of the peak season for the downstream automotives market.

Views on consumption are mixed, depending on end-use market and geographical region. Demand in northwest Europe is higher than in southern Europe, attributed to a rise in consumer confidence in Germany, which is fuelling larger purchases in markets such as automotives.

Consumption from the premium automotive sector remains high because of exports to developing regions such as Asia, caused by upward social mobility – but demand in other sectors, such as small- and mid-sized vehicle production and fibre markets, remains low.

Some sources outside of the premium automotive sector estimate that February 2013 demand is 10% below February 2012 levels.

February nylon 6 contract negotiations are ongoing.

($1 = €0.75)

By: Mark Victory
+44 208 652 3214

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