19 April 2013 09:27 [Source: ICB]
Nylon (polyamide) chips producers in Asia are being forced to trim operating rates at plants because of weak sales and declining product prices, market players said on 10 April.
In the key China market, nylon chips facilities are running at below 70% of capacity, down from 80% in the previous week. In Taiwan, producers have cut operating rates to an average of 60% from 75-80% in the previous week, market sources said.
"Nylon chips sales are still abysmal," said a source at a key Taiwanese producer. "We have already started to decrease operation to 70%, and will reach 50% in approximately two more weeks," he added.
Nylon chips prices have steadily declined over the past seven weeks because of poor demand.
On 9 April, prices were assessed at $2,760-2,780/tonne (€2,098-2,113/tonne) CFR (cost and freight) China, shedding more than 5% from the high hit in late February, according to ICIS data.
Buyers expect prices to fall further, under pressure from upstream caprolactam (capro).
Spot capro prices shed more than 6% over the same period to ICIS at $2,310-2,370/tonne CFR NE (northeast) Asia, ICIS data showed.
Nylon chips sales failed to pick up against expectations of most market players of stronger trading activities from the second half of February after the Lunar New Year holidays in Asia.
China's imports of nylon chips in February stood at 42,779 tonnes, down by 17% from the previous month, according to official data.
Most nylon chips buyers are largely adopting a wait-and-see approach and are doing procurement only if there is an immediate need for the material.
In the near term, there is cautious optimism among producers that regional demand will recover as Chinese buyers return to the market following the Qingming or Tomb-Sweeping holiday on 4-6 April.
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