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Nylon chain will roll over the strong sentiment in May

YarnsandFibers News Bureau 2015-05-14 17:50:00 – Mumbai

Benzene prices jumped sharply across regions for the third consecutive month of April, with highest rise seen in Europe. Asian benzene prices rose on strength of downstream styrene and toluene markets and also buoyed by the spurt in US numbers. Asian benzene marker, the FOB Korea jumped 8% or US$62 in April. In US, spot benzene posted sharp gains in week four of April on buying interest and gains in Europe. In Europe, reduced pygas availability pushed benzene markets up while exports and rising demand reduce domestic supply. US spot prices rose 12% while European spot jumped 17% from March.

In contracts, USA once again saw split contract settlement at US cents 258 and US cents 260 a galling, increasing 26.5% and 25.0%, respectively. The corresponding contract in Europe increased 24.6% to US$730 a ton for April. Asian was less severe, as March prices were already higher than those in other regions. Nippon Oil’s Asian contract rose 15.8% to US$770 a ton.

As benzene markets remained strong and industrial demand anticipated to improve slightly, caprolactum kept sentiment firm with supply still tight. Like April, May will continue to remain robust on similar lines. In Taiwan, a major buyer reportedly concluded its April contracts at US$1,800-1,810 a ton CFR Asia. Sinopec settled its May contract price at US$2,370 a ton, up US$70 from April for liquid good while DSM Nanjing Chemical offer for May was at US$2,450 a ton, up US$85, for solid good. Meanwhile, spot prices in April were up 4% from last month in Asian market. Caprolactum markets in US and Europe were far ahead of Asia. Spot prices rose 17% in US and 9% in Europe.

Nylon chip producers hiked offers given low inventory and firm caprolactum cost. Demand was modest as operating rate of nylon producers was rising, but buying interest for chips was cautious as end product prices lagged behind. Demand for monofilament and engineering plastics grade chips saw marginal change. Offers for Taiwan-origin chips were up 4% from March while in China, bright conventional spinning nylon-6 chips prices gained US$165 a ton from March while semi-dull chips were offered US$100 higher.

Nylon filament yarn markets were buoyed by underlying jump in caprolactum and nylon chip prices. Demand also inched up slightly as converters in sectors like hosiery and warp knitting mills acted insipidly due to tight liquidity. Nylon-6 FDY market was firm, and producers showed intention to raise the prices in May while nylon-6 POY headed upward. Nylon-6 DTY market was generally stable, given resistance from downstream mills. In China, semi-dull FDY70D/24F was traded US cents 9 a kg higher in April while FDY40D was pegged up US cents 12 from March. No change was reported in nylon filament yarn prices in Europe and US in April, but has the potential to rise in coming months, given the firm raw material prices. Meanwhile, nylon chip and nylon yarn sectors will show strong performance, with terminal demand to restore mildly in May.

Courtesy: Nylon Price Forecast Report – May 2015

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