European November caprolactam (capro) contract prices have settled at an average decrease of €50/tonne ($68/tonne), buyers and sellers confirmed on 4 December.
Although buyers and sellers reported settlements at reductions between €30-58/tonne, price cuts of €50/tonne were widely confirmed. The decline was mainly the result of a €78/tonne fall in the upstream November benzene contract price.
Buyers had initially targeted the full benzene contract price reduction. Nevertheless, when it became clear the upstream benzene December contract price would see significant increases during a month which is traditionally difficult to pass cost hikes through the polyamide chain, this strengthened producers’ position in negotiations.
December traditionally sees weak demand because of Christmas holiday end-user outages and year-end destocking.
Capro producers became determined to give away as little of the benzene cost reduction in November as possible, on the expectation that they would not be able to recoup the full benzene cost increase in December.
The December benzene contract price rose by €109/tonne.
Some producers said demand for December is rising as players pre-buy in expectation of feedstock cost-driven increases in January, but this was not widely verified.
December contract discussions have not begun in earnest. Nevertheless, one buyer said that an increase would be impossible because of the short working month.
Capro activity was limited this week by player attendance at an industry event in Shanghai, China.
Capro November contract prices were agreed at €1,828-1,855/tonne FD (free delivered) NWE (northwest Europe).