Nylon firmly supported as cost keeps market guessing

Nylon chain or polyamide markets in Asia were still on cost support in the week of 24 August as downstream remains in off season period. Cost has risen over the past one year, with benzene prices up 12% year on year and caprolactum galloping 25%. Polyamide chips were 11% dearer  while the last leg, nylon filament prices were tad up 8% in same comparison.

Benzene prices fluctuated slightly in Asian markets in the week ending 24 August, as demand apparently softened from styrene monomer, phenol and acetone markets. Lack of buying interest also prompted cargo-holders to cut offers slightly and drag down discussion levels.

Buyers were cautious on their buying decisions though, giving limited support to any increase in benzene prices. Falling inventories at ports in China also supported benzene market. However, buyers were not eager to replenish towards the end of the month. Thus, benzene prices lacked upward momentum and fluctuated narrowly.

In Europe, the benzene market was well-supplied, and with a force majeure at a styrene unit, consumption has been reducing in the past few weeks. In order to manage the surplus, about 30-40 kilo ton of benzene will head from ARA to Houston, US by end of August. Demand was bland, especially for spot delivery.

In US, spot prices were assessed narrower as supply lengthened due to high refinery run rates along with influx of fresh cargoes from Europe, although demand was termed strong from most derivatives.

Caprolactum prices were stable to firm in Asia as tight supply in the region continued to support higher price. In China, prices for liquid goods inched up while flake materials remained steady at the moment. In Europe, caprolactum market was quieter and no discussions were heard for August contracts as players were slowly resuming back to work from summer holidays.

Downstream polyamide or nylon chip prices picked up in Asia on flat to higher caprolactum costs amid positive operating margins. Demand was steady with downstream nylon yarn marker operated at stable run rate given positive profits. In Europe, nylon resin market was silent with no major businesses done as players were on summer holidays.

Nylon filament yarn markets were stable to up in Asia given operating losses for some specs. Nylon FDY prices held flat and firm on the back of high chip prices but demand was slightly thin. Nylon  DTY prices rose on rising feedstock cost despite tepid demand.