Nylon prices rise on firmer capro contracts
Asian nylon chip prices are assessed as $50-70/tonne higher, in line with the higher deals and discussions heard this week. The rise in prices also mirrors the firmer August feedstock caprolactam (capro) contracts, which were settled at around $3,400/tonne CFR NE Asia this week.
Nylon chip producers usually keep a $300/tonne spread between capro contract and nylon chip prices.
Most nylon chips producers are sold out for August and are selling September parcels. Most deals, for cargoes of more than 1,000 tonnes, were done at $3,700-3,730/tonne CFR China. By Tuesday’s close, discussion levels were hovering at around $3,750/tonne CFR China.
Offers of high-speed spinning grade nylon chips in the Chinese domestic market continued to rise by yuan (CNY) 200/tonne this week at the low end of the range to above CNY31,000/tonne EXW in eastern and southern China. Transaction prices increased by CNY200-500/tonne to CNY30,500-31,000/tonne EXW.
However, the Chinese domestic market was described to be at a stalemate, because of a wide price gap. Most makers said they are struggling with the rising feedstock capro costs and some producers intend to retreat to the sidelines to assess the situation in the feedstock sector.
As more end-users have stepped back into the market, most producers are more optimistic about the pricing outlook. Despite a fall in cotton prices, a recent outage at a Taiwan-based producer’s petrochemical complex has prompted the prices of related synthetic fibres, such as polyester, to rise. Hence, producers said they hope that nylon prices can too ride the uptrend, especially since feedstock prices are firming.
On the other hand, poor conditions in the downstream yarn segments have kept most nylon chip makers in a cautious mode. Most yarn makers continue to grapple with the high feedstock costs and have to see any success in raising their yarn prices.
Nylon 6 fully drawn yarn (FDY), nylon 6 partially oriented yarn (POY) and industrial grades
The prices of nylon 6 fully drawn yarn (FDY) and nylon 6 partially oriented yarn (POY) are assessed as $0.10-0.17/kg higher, in line with the firmer buying and selling ideas that are due to the rise in nylon chip and capro prices.
Yarn makers saw little success in their bid to pass on the increasing nylon chip prices, many producers said. The gap between buying and selling ideas is too big and this limited trade, they added.
Many producers said their inventories levels are high and the downstream yarn segment remains weak.
FDY 70 denier grade was offered at $4.30-4.38/kg FOB northeast (NE) Asia. Buying ideas were $0.10/kg higher than last week at $4.18/kg FOB NE Asia and below. However, deals were limited as buying appetite remains poor.
FDY 70 denier grade was offered in the Chinese domestic market at CNY33,000-34,000/tonne EXW, CNY500/tonne higher at the low end of the range.
However, workable levels were said to be at CNY32,700-33,000/tonne EXW. This is CNY200/tonne higher at the low end of the range.
The prices of FDY 100 and 40 denier grade are assessed as $0.10/kg higher, in line with benchmark FDY 70 denier prices, on the back of increasing upstream capro and nylon chip prices.
Offers for POY 86 were heard done at $4.25-4.32/kg FOB NE Asia, while buying ideas were heard at $4.14-4.18/kg FOB NE Asia.
POY 120 denier was heard discussed $0.12-0.17/kg higher at $4.12-4.21/kg FOB NE Asia, in line with the higher prices of POY 86 denier grade.
The prices of industrial-grade nylon 6 and nylon 6,6 tyre cord grade continue to be boosted by firm capro prices and are assessed as $0.02-0.20/kg higher this week.
Discussions for industrial-grade nylon 6 tyre cord grade were sporadic as business in the tyre cord segment remains poor. Prices are at $4.36-4.57/kg FOB NE Asia, according to most market players.
Industrial-grade nylon 6,6 tyre cord discussions were heard at $5.19-5.36/kg FOB NE Asia.
Feedstock
Capro spot prices in Asia were assessed at $3,500-3,550/tonne CFR NE Asia on 20 July, up by $20/tonne week on week.
The majority of Asian August caprolactam (capro) contracts was settled at $3,400/tonne, up by around $150/tonne from the settlement prices in July. However, some negotiations are still ongoing, company sources and traders said.
The July contract was settled at $3,250/tonne CFR NE Asia.
Contract prices in Taiwan and China were settled by northeast Asian suppliers at $3,400/tonne and $3,425/tonne respectively, company sources and major traders said.
The remaining contracts by other suppliers were heard discussed at $3,420-3,430/tonne CFR NE Asia.
The spot prices of adipic acid (ADA) of international origin rose by $250/tonne at the low end to $2,450-2,750/tonne CFR NE Asia during the week ended 27 July. Chinese and Ukraine origin cargoes were at $2,200-2,450/tonne CFR NE Asia, stable from the previous week.
Production News
Taiwan’s Formosa Chemicals and Fibre Corp (FCFC) has started up its new 5,000 tonne/month nylon (polyamide) chips plant at Dongnai province in Vietnam, a company source said.
The nylon chips plant is running at “a normal rate” after its start-up in late July, the source said.
Some of the output from the nylon chip plant will be for captive use at the company’s 4,000 tonne/month textile yarn line at the same site that was started up in February this year, the source said.
The rest of the product is for export to China, said the source, as there are no anti-dumping duties (ADD) imposed on the product from Vietnam.
Most major Taiwan-based nylon chips producers have to pay an ADD of 4.0-4.3% when they export products to China, based on a ruling made by China’s Ministry of Commerce.
The company’s nylon chips and nylon fibre facilities in Taiwan are unaffected by the recent outages at Formosa group’s facilities in Mailiao, as they are situated in a separate location. FCFC’s nylon facilities are in Changhua, the western side of Taiwan.
The outages have also not affected the supply of capro as the feedstock is sourced from imports.
FCFC’s nylon fibre units in Taiwan are running at close to 100%, said the source.
($1 = CNY6.43)
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