EU capro 2013 exports buck forecasts to rise 15% - Eurostat

28 February 2014 09:52 Source:ICIS Chemical Business

Production issues at new Asian plants and bad weather in the US may explain the figures

Exports of caprolactam (capro) from the EU rose by 15% in 2013 year on year, according to data from statistics agency Eurostat published on 19 February.

At the start of 2013, there had been widespread concern that exports would fall dramatically because of new plant capacity in Asia. Traditionally, Asia has been a major importer of European capro.

That exports in 2013 bucked expectations was attributed to problems at spinning plants in Asia, which have prevented Asian plants from consistently producing on-spec material.

The rise in exports was also attributed to European producers delivering material to sister plants in the US to cover weather-related production problems there.

At least two plants in China are now producing material which is indistinguishable from high-grade European material, sources have previously said.

There remain concerns that the additional competition from the new capacity in 2014 will result in lower prices in the region, closing off arbitrage opportunities. “I’m sure [export volume] will go down in the years to come but for 2013 it was still there”, a producer said.

The knock-on effect will be that material previously earmarked for export to Asia will remain in Europe. Because Europe is structurally oversupplied, this will create a perpetually long market, leading to downward price pressure, some sources fear.

The European capro market is structurally oversupplied. Market sources have previously estimated a structural oversupply of 1m tonnes/year of capro in Europe, highlighting the importance of the export market. There has been no European consolidation since the estimate was made.

While exports of material from the EU rose in 2013 year on year, imports fell by 31%.

Imports of capro are limited, meaning that small variations can distort percentage figures. Some sources attributed the fall in imports in 2013 to a strong demand in the first half of 2012. At the time, capro consumption in Europe in the first quarter of 2013 was estimated at 15% lower than in the same period in 2012.

Eurostat import/export data is subject to revision as more detailed information becomes available. EU figures comprise the aggregate of member states data published by Eurostat. Full-year 2013 year-on-year figures comprise the aggregate of the monthly figures published by Eurostat.

By Mark Victory