26 June 2013 23:59 [Source: ICIS news]By Renee Lawrence
European caprolactam (capro) producers and consumers have mostly agreed their June contract business at a rollover to a slight decrease versus May, market sources said on Wednesday.
Both buyers and sellers confirmed that they achieved a range of between a rollover to minus €11/tonne ($14/tonne) versus May. The full €11/tonne decrease reflects a similar drop in the price for feedstock benzene in June. The June European benzene contract was settled at €1,045/tonne, down €11/tonne versus May.
The ICIS European capro contract range for June is €1,944-1,970/tonne FD NWE.
Capro players in Europe are now looking at July business, and some capro producers indicated that they wanted to maintain steady pricing into next month, as downstream nylon 6 markets may go for a rollover in July. A clearer picture is expected next week after the European benzene contract for July is settled.
Capro customers said that it would be hard to accept rollover pricing in July if benzene costs register a sharp drop versus June. Capro producers are expected to propose their July price ideas next week, sources said.
In the meantime, several buyers and sellers have agreed June nylon 6 contracts at a rollover compared with May, as margins are too low for prices to decrease and demand is too weak for prices to increase.
Several nylon buyers and sellers are already anticipating a rollover in July contract prices because of unchanged market fundamentals. Capro is a feedstock for nylon 6.
In the meantime, a capro production outage at a European plant has tightened supply but supply is still described as comfortable. European capro producers said their export business is healthy, helping to offset the current downturn in sales within the European region.
($1 = €0.76)
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