06 August 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European nylon 6 and 6,6 August contract prices are expected to roll over, according to the majority of buyers and sellers on Tuesday.
The upstream European benzene August contract price fell by €32/tonne ($43/tonne).
Despite this, stronger than expected demand in July, the need for producers to restore margins, and some expectations that traditional holiday outages during August will be more limited in northwest Europe than is typical have led to expectations of a rollover.
Demand in July was better than expected, several sources said, which was attributed variously to general economic recovery and more working days in July 2013 than July 2012.
“We had a good July, which in my opinion is just the result of more working days,” a nylon compounder said.
Nevertheless, in southern Europe, demand remains weak, and one major player in the region estimated that demand in August 2013 will be 20% below the same month in 2012.
Views on demand in August 2013 ranged from a year-on-year increase to a rollover, to a 20% decrease, depending on end-use and region. Sentiment was weakest in southern Europe and strongest in Germany.
“For us, it's quite interesting to see the demand for this year. [We] thought 2013 would be bad but it's not so bad. I think it's a general economic recovery,” a nylon trader said.
Some sources are expecting a shorter holiday outage period in Europe in 2013 than is typical because of general economic recovery, but this was not widely expected yet.
“[We] do expect a come-back in mid-August. [We] Expect people [downstram customers] coming back earlier. Italy of course, they will only come back last week of August. It’s difficult to gauge because of the holidays,” a nylon compunder said.
It’s early in the contract negotiation process. Nylon 6 and nylon 6,6 contracts typically settle at the end of each month.
($1 = €0.75)
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