06 October 2013 15:15 [Source: ICIS news]
“Next year will be as this year,” the producer said on the sidelines of the 47th annual European Petrochemical Association (EPCA) meeting.
The producer added it expects demand to remain at a low level until at least the end of 2015.
“The next two years are clear. Afterwards we hope [demand] will go up,” the producer said.
The producer expects demand in 2013 to be around 15% below 2012 levels. Demand in 2013 has been weak because of poor macroeconomic conditions.
The producer also said there remains a need for consolidation in the European capro and nylon markets, but it does not expect anyone to exit the market in 2014.
“I don’t expect a major change. The need [for consolidation] is there, but I don’t see that anyone will [leave],” the producer said.
European capro October contract price discussions are at an early stage, with the majority of buyers and sellers expecting downstream nylon 6 October contract prices to play a large role in capro movements this month.
Nylon 6 contract prices have been stable since July, meaning that they have taken a back seat in capro negotiations in the past few months.
Nevertheless, with several sources in both the capro and nylon markets expecting October nylon 6 contract prices to fall, downstream price movements are likely to be a major discussion point in October capro contract negotiations.
Views on capro demand are mixed depending on end-use industry. Textile demand remains weak because of poor macroeconomic conditions. Orderbook volumes in October for textile applications are expected to be 10-15% below October 2012 levels, according to estimates from both buyers and sellers.
Nevertheless, engineering plastics demand has been stable in October 2013 compared with October 2012. This has been driven by the premium automotive industry, which has been shielded from the impact of the macroeconomic downturn by upward social mobility in developing countries – particularly China.
Capro end-use demand is roughly evenly split between textiles and automotive applications.
Several sources said that fourth quarter de-stocking will not be as pronounced this year as in 2012. This is because inventory levels have been kept at low levels throughout 2013. Buying remains on a just-in-time basis.
The producer echoed these sentiments, saying “there’s nothing to destock”.
The EPCA meeting runs from 5-9 October.
($1 = €0.74)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections