LONDON (ICIS)--Some early February caprolactam (capro) contract prices have been agreed at a rise of €50/tonne, failing to match the €61/tonne cost pass through from benzene, sources said on Wednesday.
The inability to match upstream cost rises was attributed by one producer to oversupply in the market and difficulties in passing on cost increases further downstream.
“We've closed all deals for February at plus €50/tonne - so our job is done now... [The settlements were] lower than cyclohexane because there is oversupply and downstream doesn't expect [nylon 6 virgin] polymers to go up by €50/tonne,” a producer said.
Nevertheless, other capro producers continue to target price hikes of €70-90/tonne, citing the need to recover margins lost against feedstock cyclohexane (CX) since November.
“In fact, it's still very open from my point of view, because I underline my request for plus €90/tonne - I'm maintaining this position and can't understand why anyone else on the seller side is doing anything else,” a producer said.
Capro buyers are aiming to limit price increases to a maximum of €50/tonne because of poor profitability in the downstream nylon 6 market.“I understand capro [margin] is too low, but it's hard to pass on the cost [downstream],” a capro buyer said.?xml:namespace>