Europe nylon demand outlook bullish on recovering autos, construction

03 September 2013 17:32  [Source: ICIS news]

LONDON (ICIS)--European nylon players are bullish on September demand, with players forecasting a recovery in construction markets and automotives driven by an improving macroeconomic situation, they said on Tuesday.

“In Europe everyone is forecasting a good autumn, demand for homes is improving and automotives,” a nylon buyer said.

Survey company Markit's eurozone purchasing managers' index (PMI) rose to 51.4 in August from 50.3 in July to reach its highest level in over two years.

Nylon players added that fibre spinning units continued to run in August this year because of high buying interest, whereas traditionally lines would be taken offstream throughout August.

“Demand [in August was] better than last year - linked to the textiles segment. They ran spinning in August and last year they were shutdown, overall demand 1-2% better than last year [in August],” a nylon producer said.

Coupled with this, additional demand is expected because of restocking from the automotive sector following summer shutdowns.

Views on overall nylon demand in August were mixed depending on end-use and applications. Players in Germany saw the most positive demand, with consumption in August 2013 estimated by one nylon 6,6 producer at around 2% higher than the same month in 2012.

Nevertheless, some of this increased demand was driven by a force majeure on nylon 6,6 at BASF.

BASF declared force majeure on European nylon 6,6 on 7 August, following an incident the previous day which was connected to a major nylon 6,6 line, a company source previously confirmed.

The location and capacity of the affected line could not be confirmed and the company could not be reached for an update on the production situation this week.

Southern Europe saw the weakest demand in August, with some sources estimating consumption as much as 35% lower year-on-year in August 2013, which they attributed to summer holiday outages in 2013 being concentrated on August, rather than spread over July and August as in 2012.

Sources in the region remain optimistic over demand in September, in line with the wider nylon market in Europe.

($1 = €0.76)

By: Mark Victory
+44 208 652 3214

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