12 November 2013 08:54 [Source: ICIS news]
By Daphne Ho
SINGAPORE (ICIS)--Spot prices of caprolactam in Asia may continue to weaken amid soft upstream benzene prices, and as producers typically attempt to reduce stockpiles towards the end of the year, industry sources said on Tuesday.
On 6 November, capro was assessed at $2,300-2,340/tonne (€1,725-1,755/tonne) CFR (cost and freight) NE (northeast) Asia, down by $82.50/tonne or 3.4% from mid-October, according to ICIS data.
“Manufacturers in China will want to reduce stockpiles during the year end to ensure liquidity in cash flows for bank loan repayments,” a major regional supplier said.
“This might trigger capro producers to target to offload more cargoes during this period and quote lower prices to spur on buying interest,” the supplier said.
Capro prices have fallen for three consecutive weeks amid ample regional supply and a strong downward pull from tumbling benzene prices.
At midday, benzene prices stood at $1,225-1,230/tonnne FOB (free on board) Korea.
Late in the third quarter, tight capro supply had steadily pushed prices higher in spite of weakness in the downstream sector.
However, supply conditions changed in mid-October as a number of capro plants in China recovered from mechanical problems that previously disrupted production, market sources said.
Fresh supply also came on stream with the start-up of Luxi Chemical’s new 100,000 tonne/year plant, they said.
Industry players are uncertain on when capro prices will bottom out, but they are not optimistic about the market outlook in November and December.
Early this week, downstream nylon chip producers were heard to have revised down their November offers for nylon chips by around $30/tonne.
Nylon chips end-users in the yarn and textile sector that continue to reel from shrinking margins have yet to make firm bids, industry sources said.
($1 = €0.75)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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