Nylon 6 prices are now expected rising after material costs of fiber producers have begun sharply increasing after lunar year holidays. The surge of benzene prices since the start of the new year in Asia has boosted caprolactam prices. Demand could however resist from nylon 6 processors now confronted with a slowing down textile production.
Nylon 6 prices are expected to rebound in China, over a sharp increase of material costs.
Caprolactam prices were this Monday surging 400 yuan per metric ton in a single day, or 3%.
After falling to 12,600 yuan by early January, CPL prices had begun bottoming out before holidays.
The surge of caprolactam prices has been triggered by a similar rebound of benzene prices.
From a low at 4,350 yuan per MT by early January, domestic prices in China have risen to 4,830 yuan, being up 7.8% in six weeks.
In the meantime, FOB Korea prices were surging 16% from 515$ to 597$ per MT.
Over the same period of time, nylon chips have only gained 600 yuan or 4% in China whereas benchmark 70D/24f DTY was rising 200 yuan or 1%.
Profit margins have therefore plummeted at nylon 6 plants, meaning that producers will now attempt to raise their offers.
On the other side of the market, their customers could however be reluctant in accepting a sharp increase of their material costs in the current period when demand is depressed in the textile industry.
Only a US-China trade agreement could boost anticipations on the market.
Source: Emergingtextiles
