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Chinese CPL downstream sector in panic
23 Apr '12
2 min read
A wave of panic has set in the downstream caprolactam (CPL) Chinese textile industry following reports that CPL was imported in large volumes in March 2012.
According to reports, CPL users in the downstream Chinese textile industry imported 84,000 tons of caprolactam in March at an average price of US $2,801 / ton.
This has affected the sentiment of other CPL buyers, due to which they have reduced procurement and become more cautious.
Sinopec too has twice reduced its CPL listing price of caprolactam in April. Its current CPL listing price is 21,300 Yuan / ton.
According to experts, there are a various reasons which will put pressure on CPL prices in the short-term.
A few of them being, lack of confidence amongst market participants, a weak domestic spot market and a strong wait-and-see attitude amongst buyers.
Currently mainstream CPL prices have declined in the range of 21,000-21,200 Yuan / ton. Overall CPL market will decline further, as downstream demand gradually becomes weak.
Nylon slice market also declined following the trend set by CPL. In April alone, nylon slice prices have dipped from 23,900 Yuan / ton to 22,300 Yuan / ton.
The immediate impact has fallen on operating rates of many nylon slice production plants.
According to reports, a few plants have shut down some production lines beginning from April, due to the influence of market demand and raw materials.
One nylon slice producer in Taiwan said it would reduce operational rate by 10-20 percent, if demand continues to be weak.
Nylon slice factories in China mainland have already reduced rates from 80 percent at the beginning of April to around 70 percent, but stocks still continue to increase.
According to reports, CPL users in the downstream Chinese textile industry imported 84,000 tons of caprolactam in March at an average price of US $2,801 / ton.
This has affected the sentiment of other CPL buyers, due to which they have reduced procurement and become more cautious.
Sinopec too has twice reduced its CPL listing price of caprolactam in April. Its current CPL listing price is 21,300 Yuan / ton.
According to experts, there are a various reasons which will put pressure on CPL prices in the short-term.
A few of them being, lack of confidence amongst market participants, a weak domestic spot market and a strong wait-and-see attitude amongst buyers.
Currently mainstream CPL prices have declined in the range of 21,000-21,200 Yuan / ton. Overall CPL market will decline further, as downstream demand gradually becomes weak.
Nylon slice market also declined following the trend set by CPL. In April alone, nylon slice prices have dipped from 23,900 Yuan / ton to 22,300 Yuan / ton.
The immediate impact has fallen on operating rates of many nylon slice production plants.
According to reports, a few plants have shut down some production lines beginning from April, due to the influence of market demand and raw materials.
One nylon slice producer in Taiwan said it would reduce operational rate by 10-20 percent, if demand continues to be weak.
Nylon slice factories in China mainland have already reduced rates from 80 percent at the beginning of April to around 70 percent, but stocks still continue to increase.
Fibre2fashion News Desk - China
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