DSM targets €120/tonne rise in nylon 6 price from 1 August

09 July 2014 10:47 Source:ICIS News

LONDON (ICIS)--DSM will attempt to increase nylon 6 prices of its Akulon and Novamid ranges by €120/tonne from 1 August, as contracts allow, it announced in a press release on Wednesday.

The price rise is aimed at recovering feedstock cost increases, the company said. 

The majority of European nylon 6 July contract discussions remain ongoing.

European nylon 6 producers are aiming to pass on as much of the €99/tonne rise in the upstream July benzene contract price as possible because of the need to recover margins. Nevertheless, buyers are heavily resistant to price increases because of oversupply and the traditional low season for automotive and fibre demand during the summer months.

Although one producer said that it had agreed virgin polymer contract prices at an increase of €0.06/kg, other producers conceded that price rises would be difficult to achieve, with at least one anticipating a rollover and a second expecting any increase to be limited to a maximum of €0.04/kg. Buyers are targeting a rollover in July contract prices as a result of low consumption and oversupply.

July demand was estimated at around 10% below June levels, although broadly in line with typical seasonal trading patterns.

In addition to a €99/tonne rise in the upstream benzene cost, producers are expecting extra cost burden on the nylon chain from the cyclohexane (CX) delta contract.

An initial third-quarter CX delta has been agreed at €176/tonne, a rise of €17/tonne compared with the second quarter delta contract, the buyer and seller involved confirmed on Monday. The settlement received further buyer support on Wednesday. Nevertheless, at least one CX producer said that it had not yet reached agreement and is not expecting to follow the initial settlement.

The monthly CX contract price comprises the sum of the monthly benzene contract and the CX quarterly delta contract.

If the third-quarter CX delta is fully confirmed, this will equate to a July CX contract price of €1,252/tonne ex-works NWE (northwest Europe).  Further confirmation from the sell side is pending.


By Mark Victory