Editor Julia Meehan, julia.meehan@icis.com

 NOTE: For full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”.

A major adipic acid producer announced this week that it would be pushing for a minimum increase of €100/tonne from 1 March. Strong integrated demand for nylon 6,6, tight adipic acid supply, export opportunities to Asia for both adipic acid and nylon 6,6 were all supporting factors for the price initiative, the producer said.

The selling source also said that its demand for non-nylon applications, such as polyurethanes (PU) and coatings, was starting to pick up ahead of the second quarter.

European consumers confirmed that the market was tight, but added that they could secure their contract volumes.

A number of consumers said this week that they had yet to enter into negotiations for March contracts, but with the benzene contract firming and availability tight, they expected prices to move up again.

An initial March benzene contract settled on 26 February at €741/tonne FOB NWE, up €18/tonne.

Tight supply of adipic acid, largely stemming from strong integrated demand for nylon 6,6 in Europe, and for adipic acid and nylon 6,6 exports to Asia,

In Asia this week, prices moved up $100/tonne in the spot market to $2,300-2,400/tonne CFR N.E Asia on the back of tight supply and impending turnarounds. Operating rates for PU were said to be around 70-100%.

Downstream, in the nylon 6,6 market, European nylon 6,6 remained in tight supply, and several buyers confirmed that suppliers were now struggling to fulfil forecast order volumes for March.

Availability of nylon 6,6 has been low since the fourth quarter of 2009, when a force majeure (FM) at Rhodia Polyamide, combined with market consolidation earlier in 2009, meant that demand outpaced supply. Market restructuring in 2009, led to an estimated 250,000 tonne reduction in yearly production capacity, buyers and sellers said.

Demand remained high for nylon 6,6 this week, buyers and sellers confirmed. This was attributed to several factors including: restocking; pre-buying ahead of expected price rises in the second quarter of 2010; and strong buying interest from Asia as a result of the strong US dollar making European material more attractive and a recovery in the automotive industry in that region increasing consumption.  Several buyers and sellers said that Asia would be a key growth area in 2010. Asian prices were €0.04-0.06/kg higher than European prices, according to sources.

($1=€0.74)

This week on ICIS news ( www.icis.com):

02-Mar-10 19:56 March ICIS IPEX petrochemical price index rises 1.2%

01-Mar-10 17:51 INSIGHT: Sumitomo Chemical sets up tall targets

01-Mar-10 15:02 Asia February adipic acid contracts rise $100-140/t