UpdateEurope April CX contract assessed at €1,140/tonne

04 April 2013 11:41  [Source: ICIS news]

LONDON (ICIS)--The European cyclohexane (CX) April contract price has been assessed at €1,140/tonne ex-works NWE (northwest Europe), a €57/tonne decrease compared with March, following the confirmation of the CX second-quarter delta on Thursday.

The monthly CX contract price is composed by the sum of the monthly benzene contract price and the quarterly CX delta contract.

The second-quarter delta contract was fully confirmed at €148/tonne ($190/tonne), an increase of €5/tonne compared with the first-quarter delta on the back of tight supply.  

European cyclohexane (CX) supply is tight because of a lack of imported material from the Middle East. Some market players said the shortage was the result of production problems in the region, but this could not be confirmed at source.

There were also unconfirmed reports of production problems at several European producers, which have limited supply.

The April European benzene contract was confirmed at €992/tonne on Wednesday, down €62/tonne from the previous month, as the initial settlement received further support from players.

The contract was initially agreed late on Thursday, 28 March at a US dollar concept of $1,267/tonne FOB (free on board) NWE and converted to the euro price at the agreed exchange rate of €1:$1.2772.

A decrease had been widely expected, as European spot numbers have softened over the course of March amid lower demand from the styrene and phenol markets as well as weaker numbers in both the US and Asia. Nevertheless, several players in the downstream polyamide chain had expected a heavier decrease than €62/tonne.

CX is the major feedstock for the polyamide chain, which includes caprolactam (capro), adipic acid (ADA) and nylon.

Capro, ADA and nylon producers will now aim to keep as much of the CX monthly contract price fall from being passed on to consumers as possible in order to restore margins.

In some cases, producers are targeting contract price increases because of poor profitability. Buyers throughout the polyamide chain said weak end-use demand means that an increase in April prices was not realistic.

($1 = €0.78)

By: Mark Victory
+44 208 652 3214

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