Asia spot caprolactam prices to fall in Apr on downstream, Mar imports
Dated- 12 Apr , 2012 - Global
Asia spot prices of caprolactam are set to fall further in April, amid weak downstream conditions and expectations of high March imports to China, said market players on Thursday.
In the week ended 11 April, caprolactam spot prices fell by $70-140/tonne (€53.2-106.4/tonne) week on week to $2,580-2,680/tonne CFR (cost and freight) NE Asia, according to ICIS.
This was equivalent to a $320-370/tonne or an 11% decrease from early February, according to ICIS.
The imports have arrived in China but the volume has not been announced yet by the customs authorities.
Several traders said they are compelled to destock prompt cargoes and cargoes that are en route now to discharge ports at lower prices.
In addition, February’s capro import volumes were higher by 32% or around 27,000 tonnes month on month at 85,356 tonnes, according to China Customs. The volumes were 110% higher year on year.
Some market players expected March imports to be at around 60,000 tonnes or even up to 85.000 tonnes and this further dampened buyers’ enthusiasm to buy.
Buyers said they are not in a hurry to confirm any purchases, preferring to wait for lower prices.
Discussions of spot offers among traders for cargoes that are en route to discharge ports are as low as $2,570/tonne CFR China, with buying ideas as low as $2,500-2,550/tonne CFR China, said traders.
‘Spot market is rather bad, buyers are not interested.’ said a trader.
In Taiwan, nylon chips producers said they may consider reducing operating rates at their plants in the “near term”, should demand weaken further.
In China, producers have lowered operating rates of downstream nylon chips plants to 72% of capacity on average because of weak demand, compared with 80% capacity earlier in April.
One of China’s largest nylon chip (polyamide) producer, Guangdong Xinhui Meida Nylon, announced early on Thursday it has shut two out of its nine nylon chips polymerisation lines, equivalent to its 10% of its total production capacity since early April, without giving an exact date.
The company’s statement cited weak downstream demand and feedstock issues as reasons for shutting the lines.
The company cut operating rates of its remaining lines to around 70% of capacity, and its yarn spinning production rates were running at “normal” rates, the statement said, without specifying what the second set of rates were.
However, the company warned that it may not have sufficient inventory of capro for regular production from May, if they could not obtain sufficient credit from the local banks in late April.
Xinhui Meida said it has reported the risk to the relevant government authorities and both parties are working out an solution to ensure stable operations of the company.
The company can produce 195,000 tonnes/year of nylon chips and 70,000 tonnes/year of nylon spinning yarn.