Caprolactam (CPL) price continues to fall in Asia in May 2012 to the $2420-$2440/MT price range.

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The price Caprolactam (CPL) in the Asian market reached a new low of $2420/MT at the end of week, with the CPL price once again falling after hovering most of the week in the $2500/MT range.  I am not going to predict where the price of Caprolactam is going, but the market conditions do not support any price increases for the material in the near future.  China has new CPL capacity coming on line in 2012, and the Taiwanese have delayed starting their new CPL plant due to weak demand in Asia.  The overall economy in China is slowing down, and the local businesses and people are starting to feel the pinch of their slowing domestic market.  Even though China will experience some growth in the domestic market in 2012, their overall economy still depends on exports to the USA and Europe to keep it rolling ahead at its robust pace.  Unfortunately the economic environment in the EU is shaky at best, and has little hope of recovering before the end of the year.  The US economy seems to have stabilized, and now our businesses are learning to adjust and remain profitable at the current sales levels.  The US economy will start back on a slow path of growth and recovery, as we continue to get the great recession even further behind us.  It will not be easy and it will not be fast, but better times will come after the 2012 Presidential election.  Expect to see the CPL price stay soft over the next 60-90 days due to weak demand from China.  I feel the Chinese will probably come back into the CPL market and make some large purchases in the next 30-60 days, and then slow their CPL buying down for the remainder of the year.  Unfortunately by the end of July 2012 China will have large volumes of CPL in inventory, and probably have enough material on hand to make Nylon 6 pellets through the end of the year.

I have seen no real change in the Nylon 66 (PA 66) market over the past 2-3 weeks.  The off grade Nylon 66 market seems to be pretty stable at this time.  Although we feel the price of off-grade PA66 needs to soften to stimulate some export orders, the domestic producers are holding firm on the material prices.  The PA66 market is a more balanced market with supply and demand then the PA 6 is today, with the sale of both prime and off-grade PA 66 in balance at today’s production levels.  Meaning the producers are currently selling all of the scrap they produce at acceptable margins without any problem.

Based on what I am hearing in Houston, the domestic olefins market will continue to see softer material prices over the next 30-60 days.  Both the price of PE / PP has softened over the past 30 days, and will go into June with more price decreases coming our way.  The Asian olefins export market has been terrible for the first half of 2012, with no relief for a swift recovery in sight.  The producers have worked through most of their seasonal plant turnarounds, and have no good excuses to take down more olefin production capacity.  The public warehouses in both China and the USA are full of packaged PE / PP resins, with not enough demand from manufacturing to bring down the current inventory levels.  Buy what material you need to keep running, and expect to see resin prices soften further during June and July.

If you would like to read about China’s current economic slowdown please see the recent article in The New York Times by Keith Bradshear entitled “China’s economy suffers ‘sharp slowdown’ ”

Dualloy Sells Nylon 66 – PA66 Off-Grade (wide-specification) Pellets / Regrinds

Dualloy sells the following Nylon 66 (PA66)  / Nylon 6 (PA6) materials:
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Nylon 66 Off-Grade Textile Bright Pellets
Nylon 66 Off-grade Pellets w/ up to .02% TiO2
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Nylon 66 Bright Regrind from Lump/Chunk
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