European caprolactam (capro) January contract targets are sharply divided, with both buyers and sellers bemoaning weak margins on 14 January.
Upstream benzene contract prices rose by €109/tonne in December and €37/tonne in January. The feedstock cyclohexane (CX) Q1 delta contract price rose by €5/tonne – resulting in a feedstock cost rise of €151/tonne across December and January. The December capro contract price rose by €30-40/tonne.
Capro producers are fearful of further benzene contract price hikes in February as spot prices are currently trading above contract.
“It’s surprising [the benzene spot price rise], so people are waiting. We should have higher than benzene because CX is jumping up as well, so I’m really looking for the full 42. And now it’s even harder knowing that benzene will probably jump up again in February,” a producer said
As a result, they are targeting January price rises of at least the €42/tonne cost pass-through from the January benzene and CX feedstock cost increases.
“Our [price] increase last month was not enough we have this month benzene and [the] CX delta [rises] which is quite some increase. We need €80-90/tonne – it will be difficult, but it’s what we need. [Buyers] accept there will be an increase but their position is uncertain,” another producer said.
Buyers, conversely, said that their own margins are limited because of the failure to pass cost increases through to the nylon 6 market in December and oversupply in the market. Buyers are aiming to limit any price rise to a maximum of €30/tonne, with some arguing for a rollover or slight decrease.
“There is a strong resistance [to contract price rises] from our side not to pay for two main reasons. Firstly the market is not brilliant and there’s a lot of material. Second, in December [nylon 6] polymer [prices] didn’t go up,” a buyer said.