The price of prime Caprolactam (Capro) is now trading above $3620/MT ($1.642/lb.) delivered in the Asian market for April shipments. This once again is a historically high price for prime Capro that is being driven by the supply disruption in Japan, along with Honeywell’s, Hopewell, VA Capro plant being down due to a shortage of material feedstock. Honeywell has declared force majeure on Capro due the supply chain disruption caused by Sunonco declaring force majeure in cumene. Cumene is the feedstock used to make Phenol, which is then used to make Nylon 6. This of course is not good for the average prime Nylon 6 buyer, because this situation is pushing the price of prime material at $1.55/lb. or higher in the USA market. Most domestic Nylon 6 producers are getting the higher prices that they are demanding for prime pellets, or else the will just flake the Capro and sell the material in the Asian market.
I think that the Nylon 6 prices will only stay elevated as long as there are problems in the feedstock supply chain. We are seeing the shops in China starting to slow down once again, due to a slowing market, and the Central Government’s tightening of the money supply and credit in China. Their housing market is out of control, and will have a price correction in the not too distant future. The Chinese Central Government does not want to see their housing market collapse like ours did starting in 2008. So they have increased their interest rates on home loans to slow down the speculative growth in their domestic housing market. At the same time the Central Government is making the Banks maintain a healthy cash reserve that is impacting the average company’s ability to borrow money and pay their bills.
In China most business is done on a cash basis. Our customers come to inspect the Nylon 66 and Nylon 6 materials in our warehouse. Then they pay cash for the material that they are buying, and send their truck in to pick up the material. Now some of our customers are having trouble getting THEIR CASH out of the Bank of China to purchase material, because the Banks are holding the customers money so it does not go below the set cash reserve. So with the money supply getting tighter in China, as business is starting to slow down again, Nylon 6 prices will fall once world Capro production ends the current force majeure supply situation. The price of Nylon 6 is over heated in today’s market, and should correct once Capro supply returns to normal due to the slowing market in China and the world.
The Nylon 66 market still shows no signs of softening at this time as well. Both of the domestic PA66 producers are sold out, and material feedstock prices only seem to keep going up. The price of reactor grade Propylene is up again in April, so this should drive up Ascend’s price for Nylon 66 feedstock. With both domestic producers in a sold out situation I don’t see the price of PA-66 softening any time soon.
When are the price increases going to stop? Once the US economy goes into anther tail spin? When the price of prime Polypropylene Homopolymer gets to $.93/lb. or higher for truck load quantities something is out of line here, or am I the one that is missing something. Two things are going to happen with today’s current plastics market. One – The major polymer producers are going to drive the price of materials up so high that it is going to slow the growth in our domestic economy. Two – The current high prices for plastic feedstock / polymers is going to open the door for more Asian imports of plastic into the US market. We all must not forget when ABS was $1.50/lb. or higher in the USA until Chi Mei entered the game. Then is seems that the price of prime ABS went down to around $.90/lb. for prime ABS resin from Taiwan. Everyone likes to hate the Asian producers for low prices, but their imports will force the US domestic polymer producers prices down to come in line with the world market.
Nylon 66 Bright w/HS Pellets
Nylon 66 Semi Dull Wide Spec Pellets
Nylon 66 Dull Second Quality Pellets
Nylon 66 Textile Bright Pellets
Nylon 66 Pellets w/ up to 0.02% TiO2
Nylon 66 Mixed Color Regrind
Nylon 66 Bright Regrinds
Nylon 66 Semi Dull / Mixed Luster Regrind
Prime Nylon 6 Pellets 2.7 RV – Natural
Packaged in 1,500# boxes
Nylon 6 Kettle Bottoms
Nylon 6 Depoly Residue
Nylon 6 Solidified Oligomer Waste
Call for MOQ and current material prices.
Aged/Obsolete Virgin Pellets
Clean uniform Plastic Regrinds
Nylon Fiber Bales
Please feel free to contact me at: JamesGubera@dualloy.com