Polyamide prices firm on benzene rally amid US-China trade war
Polyamide or nylon prices remained firm in the week of 17 August as rally in benzene markets continued to bolster downstream derivatives. The Chinese Yuan has depreciated sharply against the US$ as trade tensions between the two biggest economies climb new height day after day. The weak Yuan has dampened demand for benzene imports among buyers, who are increasingly turning to domestic supply to meet their requirements.
With China’s Q3 manufacturing-for-exports season kicking off, consumption of chemicals has beefed up. Usually benzene benefits at this point of time as it is a base chemical for most derivatives like styrene monomer, phenol and caprolactum.
Benzene this week
Benzene prices rallied in the second full week of August bolstering Asian markets amid ongoing US-China trade war. However, slump in world stock and bulk commodities weighed down economic outlook, and prices started to drop later in the week. In Europe, oversupply ruled the benzene market, but prices were supported by open arbitrage to US. Meanwhile, US spot prices were slightly higher as strong downstream demand for styrene and phenol counterbalanced the lengthening benzene supply in the region.
Polyamide or nylon precursors
Caprolactum prices increased further on the back of rising benzene costs and supported by short supply in Northeast Asia. In China, caprolactum spot and contract offers were hiked although demand was modest. In Europe, contract discussions for August were ongoing and some were yet to begin because of summer holidays. There were talks on the buy-side of another sharing of benzene cost between buyers and sellers as August benzene contract fell from July. The sell-side of the caprolactum market wants stable pricing. Nevertheless, most talks continued and yet to make progress for August settlement.
Polyamide or nylon chip prices gained in Asian markets on rising feedstock cost. Producers had no choice but to increase offers in order to protect their margins. Demand was flat as downstream buying appetite was modest since terminal sector was sluggish. In Europe, early nylon 6 August contract agreements were heard at rollovers at the moment.
Nylon filaments
Filament yarn markets were firm amid rising cost and prices generally rolled over on the week. Nylon FDY prices held stable on the back of high chip prices but demand was thin. Nylon DTY prices were range bound on a stable note amid high cost and cautious downstream demand.
The tabulation below covers nylon chain pricing for the current week (ending 17 August), previous week (ending 10 August) and also the tendency of price to move in the ensuing week (ending 24 August). The predictions for price tendency are closer to actual movements in 80 percent of our attempts. The price spread analysis helps to broadly understand margins of end-products vis-a-vis their material inputs.
Caprolactum is used to manufacture nylon 6 for textiles and carpets, and engineering plastics for electronics and automobiles.
Nylon, also known as polyamide, is mainly used in fibre and engineering polymer applications. Nylon fibres are used in textile apparel, carpets and home furnishings while nylon engineering resins are used in automobile parts.
