07 March 2013 11:32 [Source: ICIS news]
CHONGQING, China (ICIS)--Asian caprolactam (capro) spot prices are under pressure to weaken because of poor downstream demand and soft feedstock values, but the market is being buoyed by tight supply, industry sources said on Thursday.
In the week ended 6 March, prices were $2,500-2,530/tonne CFR (cost and freight) NE Asia, ICIS data show.
Spot capro prices have gained 16%, or $340/tonne (€262/tonne), since the end of November 2012, backed by tight supply.
But demand could not sustain the upward momentum immediately following the Lunar New Year holiday in the key China market, with feedstock benzene exerting downward pressure on the market.
Spot capro prices are showing signs of weakening after hitting $2,530/tonne CFR NE Asia, market players said at the sidelines of the 11th China International CPL (caprolactam) & PA (polyamide) Market Forum 2013.
“I had scaled back my selling ideas to $2,480-2,500/tonne CFR NE Asia, but even then there is no buying interest,” said a Russian producer.
Demand for capro derivatives has also been lacklustre since 2012 because of weak demand from the US and eurozone for Asian-made products.
“It is impossible for capro prices to increase further if there is no demand support,” an end-user added.
Most market players now expect little improvement in demand for the first half of the year, contrary to earlier optimism about a rebound in March.
Capro spot prices are also expected to stay weak because of China's rapidly rising capro capacity and the resultant fall in its import dependency.
($1 = €0.77)
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