BASF aim to raise Europe nylon 6, ADA, capro prices €110/tonne

21 February 2014 11:03 Source:ICIS News

LONDON (ICIS)--European chemical major BASF is planning to increase the prices of nylon 6 base polymer and intermediate, caprolactam and adipic acid by €110/tonne with immediate effect or as contracts allow, the company said in a press release on Friday.

Several European nylon 6 players have now confirmed February contract prices at a rise of €0.05/kg compared with January, with rises driven by upstream costs.

Some producers said it had agreed price rises of €0.07-0.10/kg because of the need to restore margins. This could not be confirmed on the buy-side at the time of writing.

High European benzene costs are squeezing caprolactam (capro) chain margins, with several sources throughout the chain calling the situation desperate in the week ending 18 February.

Several European capro February contract prices have been reported at rises of €50-61/tonne, depending on starting point because of rising feedstock costs.

A producer said it had been unable to achieve more than the feedstock cyclohexane (CX) cost rise of €61/tonne because of poor profitability in the downstream nylon 6 market.

Nevertheless, contract negotiations are ongoing, and at least one major producer continues to target price rises of €90/tonne because of weak margins.

Producers throughout the polyamide chain have been complaining of low margins since 2011, when poor macroeconomic conditions meant that feedstock cost spikes could not be passed through to the market. Spread levels have now seen significant recovery.

Cyclohexane (CX) is the feedstock for the capro chain. The CX monthly contract is a formula-based price comprising the quarterly negotiated CX delta and the upstream monthly benzene contract price.

Although nylon 6 and caprolactam spreads against CX were broadly increasing between January and October 2013, spreads have shrunk since November contract prices were settled because of spiking upstream benzene costs, which could not be passed on downstream.

The spread between European capro contract prices and nylon 6 contract prices has fallen by €12-35/tonne compared with the November contract settlement, according to ICIS analysis.

Between November and January, the spread between capro and feedstock CX contract prices has decreased by €66-89/tonne.

February capro and nylon 6 contract negotiations are ongoing.

Nylon 6 to capro to CX price spread (€/tonne)

 

Capro contract FD NWE

Nylon 6 virgin polymer contract FD NWE

Nylon 6/capro Spread

CX contract ex-works

Capro/CX spread

November

€1,828-1,855/tonne

€2,020-2,140/tonne

€192-285/tonne

€999/tonne

€829-856/tonne

December

€1,868-1,885/tonne

€2,050-2,140/tonne

€182-255/tonne

€1,108/tonne

€760-777/tonne

January

€1,913-1,917/tonne

€2,070-2,190/tonne

€157-273/tonne

€1,150/tonne

€763-767/tonne

 

By Mark Victory