Subscriber note: ICIS plans to discontinue the gross market contract price assessment from the table above from 1 January 2012. Please send any comments to the editor, Julia Meehan at: julia.meehan@icis.com
Contract pricing
Contract price discussions are in the very early stages following Friday’s benzene contract settlement for August at €886/tonne FOB NWE. However, it is reported that some caprolactam contracts were agreed ahead of the August settlement.
According to market sources, a major consumer and one of its suppliers agreed their August contract price at an increase of €90/tonne. Although not fully confirmed by all of the parties concerned, a second smaller buyer said that it too had agreed a contract with a supplier at an increase of €90/tonne. The buyer did not disclose its actual market price but hinted that it was slightly above €2,000/tonne.
Others said that suppliers are seeking a €150/tonne increase for August volumes, following the benzene settlement.
Further updates relating to the August contract prices are expected in the coming weeks. One major producer did not expect to settle any time soon, partly because of summer holiday absences but also because the ideas of producers and consumers in relation to the current supply and demand dynamics of the market are so different.
Supply and demand
As mentioned, players differ in their opinion of the balance of the market. Consumers do not agree that the supply situation in Europe is as critical as producers say it is. However, according to producers, some customers are “begging” for material because of various unplanned outages and loss of production at European facilities over recent months.
UBE Chemical Europe remains in force majeure at its 95,000 tonne/year facility in Castellon, Spain. UBE was unable to give any details or ideas as to when the force majeure will be lifted.
BASF and DSM have also lost some production in recent months, adding to the supply constraints, other producers said.
Meanwhile, nylon 6 demand has slowed because of the summer holidays, but looking ahead to September and into October the outlook remains positive.
Asia
Prices in Asia continue to firm, with gains of $30-50/tonne seen this week. In the key Chinese market, spot caprolactam was valued at $3,530-3,600/tonne CFR China. Demand for caprolactam in entering its peak season for nylon production and this is supporting pricing sentiment.
The majority of contracts have settled at $3,400/tonne, up by around $150/tonne from the settlement price in July, though some negotiations are still ongoing. The July contract was settled at $3,250/tonne CFR NE Asia.
($1=€0.70)
This week on ICIS ( www.icis.com ):
This week on ICIS ( www.icis.com ):
02/08/2011 16:51Poland's PKN Orlen wants Anwil fertilizer, PVC offers by end of year
02/08/2011 11:02 Asia August capro settles around $150 higher this week
02/08/2011 09:54 Taiwan's FCFC starts up nylon chip plant in Vietnam
