31 July 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European caprolactam (capro) contracts for July have decreased by €35/tonne ($47/tonne) on average, sources confirmed on Wednesday.
Sellers had hoped to roll over prices in order to hold on to margins, but current demand levels did not make this possible. However, they were insistent that some margin rebuilding was necessary and were not willing to give away the full benzene decrease.
“Our policy is to price for a margin increase,” one producer said. “We are willing to sacrifice volumes and we want to send this message out to the market.”
Sellers say they are taking a step-by-step approach to improving profitability in the market.
Buyers had originally targeted the full decrease in the benzene price for July of €67/tonne, citing slow demand.
The ICIS European capro contract range for July is €1,909-1,935/tonne FD NWE.
Demand is slow but most sources say it is as expected for the time of year.
Focus is now turning to August pricing and demand. A quiet month is expected overall due to the ongoing holiday period. Players were speculating that August benzene contracts would decrease slightly, in which case producers were expected to try to roll over capro prices.
An initial European August benzene contract was agreed late on Wednesday at €946/tonne, down €32/tonne from July.
($1 = €0.75)
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