Europe capro players' July price targets emerge

09 July 2014 16:27 Source:ICIS News

LONDON (ICIS)--European caprolactam (capro) producers are aiming to push through as much of the upstream benzene price increase through as possible, sources said on Wednesday.

Nevertheless, they accept that this will prove difficult because of the approach of the low season for demand during the summer months.

“Everybody's going to lose some spread,” a producer said.

Producers are targeting price rises of €50-100/tonne, with one producer saying it has already settled some business at a rise of €50/tonne.

Buyers are aiming to limit price rises to €35-50/tonne, with one saying it had closed one contract at an increase of €35/tonne.

Buyers accept that sharp cost rises have created a difficult margin situation for producers. Nevertheless, they highlighted falling downstream nylon 6 demand and the difficulty in passing price increases through to that market, necessitating modest capro cost increases.

“We'll have to pay something even though the market downstream is really bad and pressure from filament and other fibres. [the] present situation for our suppliers is very bad as well,” a capro buyer said.

Nylon 6 demand in July has been forecast by market players at around 10% below June levels, although broadly in line with typical seasonal trading patterns.

By Mark Victory