Europe nylon 6,6 tightness worsens despite upstream ADN supply improvement

17 April 2018 15:24 Source:ICIS News

Roll of nylon climbing

LONDON (ICIS)--The European nylon 6,6 supply has continued to tighten this week despite improving supply in the upstream adiponitrile (ADN) market, sources said on Tuesday.

In early April, Butachimie lifted its force majeure on ADN at Chalampe, France. ADN is a key raw material in the nylon 6,6 chain and had become increasingly tight over the first quarter of 2018 amid strike action at the company's site in February.

ADN supply has been improving over the last month in the market but prior production issues in the hexamethylene diamine market (HMDA) means that most nylon 6,6 producers in Europe are still in force majeure.

The time lag between the production of raw materials and the turning of those materials into commercially available nylon virgin polymer can be substantial.

As such, the nylon market in Europe has continued to tighten even further this week, despite the supply improvement upstream.

“Nobody has stock anymore [and the rail] strike is a real headache,” one buyer commented.

“We see big demand, [we have] a lot of orders so we have to make allocations for May [as] we don’t have enough [material]. Most of [buyers] are empty, they are trying to increase their stocks but it’s impossible,” one producer added.

Availability has been further hampered by the ongoing rolling strikes in France, which have caused logistical delays for some players moving material from and through that region of Europe.

Meanwhile, demand has remained strong throughout the last four months of the year, with downstream automotive and compounding sectors driving a lot of the additional buying appetite.

Negotiations for April business have been slow so far.

However, with so many producers in force majeure and tightness continuing, further increases are possible, although some buyers previously said that they were already paying much higher prices due to ongoing shortness in the market.

The March European nylon 6,6 virgin polymer contract was assessed stable to firm at €3.48-3.84/kg FD (free delivered) NWE (northwest Europe).

Looking ahead, the market is expected to remain tight for a significant period of time.

Players disagree on when conditions will return to normal, but most now expect availability to start to improve, although the rolling strikes in France are likely to limit improvements until they end.

Upstream costs for May are unclear, although fundamentals are likely to dominate price discussions next month again.

Nylon, also called polyamide, is used mainly in fibre and engineering polymer applications. Nylon fibres are used in apparel, carpets and home furnishings. Nylon engineering resins are used in automotive parts.

Pictured above: Roll of nylon climbing rope 
Source: Denis Closon/REX/Shutterstock

Focus article by Ciaran Tyler

By Ciaran Tyler