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Asian nylon chips producers may slice operating rates

01
Jul '10
As per informed sources, nylon chips manufacturers, pan-Asia, are likely to further drop their operating rates, amidst weak demand from the downstream nylon textiles industry and dipping values of feedstock caprolactum.

Sources also informed that, the nylon chip market trends was in a downward pace, as most spot buyers practiced a wait-and-watch stance. But, there were also those, who purchased nylon chips when bearish, but only of minimum volumes, so as to cover the immediate requirements.

More so, nylon chip sales have been extremely slow and industry experts are still unaware of the price that the downstream industry is expecting from the market.

Nylon is extensively utilised in the production of hosiery, knitted apparels, filaments, ropes, threads, tire cords and nets.

Between June 22 and 28, Nylon chip prices in China fell from RMB 22,850 per ton to 22,500 per ton, a drop of RMB 350 per ton. However the price has now stabilized since the last 2 days.

The feedstock caprolactum market, in China and Taiwan, continued its descending path, because traders closed their deals at rock-bottom prices, and values dived further to a three-month low.

Caprolactam prices in China were assessed at RMB 19,500 per ton on June 30 compared with RMB 19,900 prevailing on June 22.

Since two weeks, bad sales figures have pushed Taiwan-based, Li Peng Enterprise Company, a major nylon chips manufacturer of the region to slice production at its 1,000 tons a day plant to less than 40 percent.

Another company opting for shutting down is Zig Sheng Industrial Company, which was intending to shut its 150,000 ton a year facility at Taiwan for maintenance, early July, if reduced demand situation continues further.

Further more, owing to provincial government duty imposition on production, production of nylon has also been affected in East-China's key textile production province of Zhejiang from July 1 – September 13, when production plants are likely to come to a halt.

As per Zhejiang's Economic and Information Technology, the restrictions imposed are aimed at reducing carbon emissions and commercial usage of power, during peak summer time.

But a Taiwanese caprolactum manufacturer, who supplied feedstock to plants located in the affected area, mentioned that, the subject of cut-down will play an adverse impact of about 20 percent on production.

However, plants based in Northern China and Guangdong have welcomed the new, as this means filling up of their order books, which in turn means more business for them.

Fibre2Fashion News Desk - India


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