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Negotiations for March capro in Europe will likely progress into April

March 28/2011

(ICIS) -- Negotiations for March caprolactam (capro) in Europe will likely progress into April, with buy and sell ideas still far apart, a buyer said on the sidelines of the International Petrochemical Conference (IPC) on Sunday. The expectation is for sure below [an increase of] EUR 100/tonne. To be honest, with some [producers] we are quite far away, with others not so far, the buyer involved in the production of nylon (or polyamide) said.

Producers had earlier started with targets of an increase of EUR 150-200/tonne (USD 211-282/tonne), but have since revised these downwards in light of a sharp drop in demand for polymers following the Japan disaster. Producers' targets, though, were still at a range of plus EUR 100-170/tonne.

Despite this reduction in offtake and a rollover in the upstream March benzene contract, supply concerns allowed producers to remain bullish in their expectations for March capro agreements.

While acknowledging tightness in the market, the consumer said that margins for capro production were high and any increase in costs would need to be passed on further downstream as nylon margins had been squeezed considerably.

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