Europe capro March price targets narrow

20 March 2013 17:36  [Source: ICIS news]

LONDON (ICIS)--European caprolactam (capro) March contract price targets are narrowing, sources said on Wednesday.

Several contract partners have already settled March prices between a rollover and an increase of €14/tonne ($18/tonne), with rises of €7-10/tonne frequently mentioned as representative.

Price rises were attributed to a €14/tonne increase in the March upstream benzene contract price. Poor downstream margins and an inability to pass capro price rises into the downstream nylon 6 market have limited March capro contract price increases, so far.

“March [contracts are] very close to closing. [In] my case... [closer] to plus €10/tonne, I started with asking for half benzene, but it doesn't matter to waste time for a few euros,” a capro buyer said.

Downstream demand year-to-date in 2013 has been approximately 15% below the same period in 2012, according to market estimates. Nevertheless, demand is sharply divided depending on end-use industry.

Premium automotive demand is approximately 2-3% below the same period in 2012, sources estimate. Consumption is being buoyed by exports to Asia resulting from upward social mobility.

Nevertheless, non-premium automotive demand is up to 40% lower in 2013 year-to-date than the same period in 2012, players estimate. This is because fewer non-premium automotives are exported and poor macroeconomic conditions have reduced consumer purchasing power in Europe, weakening demand.

“With regard to engineering plastics, [which are predominantly used for automotives] what we see in Germany is a little slow but not dramatically, whereas south Europe in March year-on-year is -30 to -40%. [The auto industry is] around 15% down year-on-year overall,” a capro buyer said.

($1 = €0.78)

By: Mark Victory
+44 208 652 3214

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