Another Europe nylon 6 producer announces price hike target

20 February 2013 10:25  [Source: ICIS news]

LONDON (ICIS)--Another European nylon producer said on Wednesday that it is targeting price rises for nylon 6, despite buyer resistance to any increases.

German-based producer Lanxess is targeting a price rise of €0.25/kg ($0.33/kg) on its Durethan B nylon 6 product line from 1 March, it said, as the result of “continuing pressure on the material cost base.”

Other nylon 6 producers are targeting February contract price rises of €0.05-0.10/kg because of the need to restore margins. Nylon 6 contracts typically settle at the close of each month rather than the beginning.

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

Buyers state their own need to preserve margins and are aiming to limit price increases as much as possible as a result.

Demand is too low and the nylon 6 market too oversupplied to justify price rises in the first quarter, several buyers said, adding 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.

“Demand is very slow and the order entry is very worrying - it's very very depressed.. Volumes are simply not there - whether it will recover I don't know but I forecast a very tough Q2,” a nylon buyer said.

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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