Quake impact - Taiwanese look for other caprolactam sources
22 Mar '11
2 min read
Japan's devastating earthquake has affected its caprolactam spot trade with Taiwan badly, creating a panic situation. Traders of Taiwan have started buying caprolactam spot from others countries instead of Japan.
Because of Japan's situation, there is also big gap between demand and supply, resulting in a price rise too. In Asia, caprolactam spot prices of February contracts were US $3,530-3,560 / ton CFR China last week, much higher compared to its previous week.
Taiwan's traders have bought shipments of caprolactam spot equivalent to a month's exports of caprolactam spot from Japan, in just last three days.
Taiwan's traders have bought more than 10,000 tons of caprolactam spot, at US $3,570-3,600/ ton CFR Taiwan in last three days for shipment in April / May from Eastern Europe, Belarus, Russia and Ukraine.
In addition to that, some deep sea goods for China have been diverted to Taiwan too.
At present, downstream nylon manufacturers in Taiwan are not showing much interest in buying caprolactam spot from Japan. They are scared of short supply of April contracts from Japan after the devastating earthquake.
Of Japan's total caprolactam production, the big four players are Ube Industries, Sumitomo Chemical, Toray, and Mitsubishi Chemical Corporation (MCC) with combined production capacity of 525,000 tons / year.
In Japan, its three caprolactam plants have already announced reduction in production for their maintenance. It will reduce their caprolactam output by 50 percent in the short term. So traders in Taiwan have started weighing other options.
Taiwan's nylon manufacturers import nearly140,000-150,000 tons of caprolactam from Japan, each year. But under the circumstances, it is expected to decrease drastically.
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