US producers seek 5 cent/lb hike on capro, nylon 6

Focus story by Tracy Dang

HOUSTON (ICIS)–Two US producers are separately targeting another round of price increase for their feedstock caprolactam (capro) and nylon 6 polymers in the Americas, effective 15 May or as contracts allow, according to news releases made available on Monday.

BASF intends to raise the price of its capro and nylon 6 (also known as polyamide 6 or PA6) by 5 cents/lb ($110/tonne) in North America. The company did not cite a reason for the price increase in its news release dated Friday.

Honeywell on Monday announced a 5 cent/lb price increase initiative of its own for its capro and nylon 6 customers in North and South America, saying it “re-evaluated its pricing on specialty polymer nylon products because of higher raw material costs”.

Upstream benzene values had rebounded significantly in the last few months, with contract prices rising from $2.01/gal in February to $2.84/gal in May. These cost increases had made their way through the supply chain, pushing up prices for many downstream derivatives, including nylon.

The May capro and nylon 6 price increase initiatives are the second attempts this year that US producers have made to raise prices.

Last month, several producers had announced intentions of raising capro and nylon 6 prices by 7 cents/lb.

BASF’s targeted increase became effective 15 April, while Honeywell’s intended hike became effective 20 April. Additionally, DSM announced a similar price increase initiative for 1 May.

“We have been fairly successful with the April price increase,” a producer said, although the source did not specify how much buyers were accepting.

A distributor said that its supplier was pushing for an increase of 5 cents/lb, but it agreed to pay 2 cents/lb more.

Another distributor believes that producers will achieve about 3-5 cents/lb from the April increase and potentially another 2-3 cents/lb from the May increase.

“The general thought is [producers] will get some of it,” the source said. “I don’t mean to hesitate, but I told people if benzene is truly moving up 7 cents/lb, then [producers] will try to recover benzene costs. I think it’s going to stop the downward spiral [in the nylon market].”

Nylon 6 prices had been trending down because of significant drops in raw material costs at the end of 2014 and beginning of 2015.

Upstream benzene contracts had fallen from $5.28/gal in July to $2.01/gal in February.

Although benzene values had trended up since then, prices remained well below levels around this time last year, leaving players in the downstream nylon market sceptical that price increases were widespread.

“I have not seen anything stick in the markets that we overlap with,” a compounder said. “I am suspecting that this increase and last month’s are just really one in the same.”

ICIS-assessed prices on Monday for US injection moulding grade of nylon 6 in bulk were $1.13-1.23/lb.

Major North American producers of nylon 6 include BASF and Honeywell.

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