Market and product

SINGAPORE (ICIS)--Asian nylon 6 (polyamide 6) chips producers are seeking higher prices in July in line with rising feedstock caprolactam (capro) prices, industry sources said on Thursday.

Asian nylon chip prices were assessed as unchanged at $3,500-3,550/tonne (€2,485-2,521/tonne) CFR (cost & freight) China on 14 June, according to ICIS.

“Nylon chip prices are stabilising for now. We are not selling at below $3,500/tonne,” a major northeast Asian producer said.

In addition, the rising feedstock spot capro prices are prompting some producers to seek higher July offers at $3,600/tonne CFR China.

“Buyers still need to stock up their cargoes to prepare for production at [the] end of the year, so I think the buying sentiment will continue to gain pace in July,” the northeast Asian producer added.

More buyers were heard making enquiries, but they were hesitant to purchase bulk cargoes and are spreading their purchases throughout the month by buying in batches of around 200-300 tonnes, said a separate northeast Asian producer.

Their monthly requirements are typically at around 1,000 tonnes, the producer added.

However, these high prices may be resisted by the weak downstream end-user sector, industry sources added.The downstream nylon industry in the key China market is currently experiencing an off-peak demand season, which usually occurs in the second quarter of the year.

The improved buying sentiment of nylon chips in the middle of Mayhas contributed to the rising prices of the product.

In addition, the current rise in spot prices of upstream feedstock capro is supporting the price increase initiative for nylon chips.

Changes in feedstock capro prices typically mirror the selling indications of nylon chip producers.

Asian spot capro prices rose to $3,240-3,260/tonne CFR China, up by $60-70/tonne week on week on 15 June, rebounding from a low of $3,100/tonne CFR China on 25 May, market sources said.

Capro spot prices have fallen by 12% since 30 March, after hitting a historical high of $3,580-3,610/tonne CFR China, ICIS data showed.

However,some nylon chip producers said that those who were seeking higher prices may could be overly optimistic.

A third northeast Asian nylon chip producer said this is because buying enquiries are not active enough. The producer is expecting difficulty in pushing prices to beyond $3,600/tonne CFR China.

“I am not sure about $3,600/tonne CFR China right now. Let’s take things slow, one step at a time,” the producer added.

“From the capro [producers’] point of view, nylon chip prices should be rising, but the downstream spinning yarn [sector thinks that] there is no support for [nylon chip] prices at all,” another producer said.

Nylon yarn and benchmark fully drawn yarn (FDY) of 70 denier grade fell by $0.20/kg or $200/tonne week on week to $3.96-4.03/kg FOB (free on board) northeast Asia.

Nylon 6 (polyamide 6) is used in the manufacture of hosiery, knitted garments, threads, ropes, filaments, nets and tyre cords.

Capro is an intermediate product primarily used in the manufacture of nylon 6 fibres, plastics and other polymeric materials.