13 March 2013 15:47 [Source: ICIS news]
LONDON (ICIS)--European caprolactam (capro) plant operating rates have been reduced to 80% of nameplate capacity because of weak demand, according to market estimates on Wednesday.
Consumption in the first quarter has been estimated to be 15% lower than the same period in 2012. Although capro players said the first quarter of 2012 was a particularly strong one and not a good base year for comparison, they estimated that Q1 2013 demand is up to 10% below average first-quarter volumes.
Weak demand is the result of poor macroeconomic conditions, which have limited consumer purchasing power.
Nevertheless, demand levels are dependent on end-use application and geographical region. Premium automotive demand remains firm because of upward social mobility in Asia, while demand in other automotive applications and in fibre applications is weak.
In southern Europe Q1 demand has been estimated at up to 30% below the same period in 2012. This is because southern Europe has been more heavily impacted by the eurozone crisis.
“[demand in Q1 2013 is] 15% down year on year and 10% down on a normal year. The only one performing better is Germany, but other markets way down - southern Europe is easily minus 30%,” a capro buyer said.
Coupled with this, buying interest in Asia is low. Expectations that Asian feedstock costs will fall in April have caused Asian capro buyers to move to the sidelines of the market in anticipation.
Asia is a key importer of European capro and finished goods.
($1 = €0.77)
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