|
| Caprolactam prices zoom 65% from Feb low |
| B G Shirsat & Rajesh Bhayani / Mumbai Sep 16, 2009, 00:51 IST |
|
Here’s a good news for the producers of caprolactam — a white, water-soluble compound used to make a type of nylon. International prices of the compound have zoomed from their February low of Rs 70,000 a tonne to Rs 116,000 a tonne as of today.
What is more, the prices of benzene, the basic raw material for producing caprolactam, have now slipped to Rs 39,902 a tonne from a year-ago level of Rs 58,950 a tonne. The result: Caprolactam producers have started getting higher margins now, up 12.5 per cent to Rs 76,008 a tonne from a year-ago level of Rs 67,550 a tonne.
The year-on-year margins for caprolactam producers had declined by 29 per cent in February 2009 when prices of the compound dipped to Rs 70,000 per tonne from Rs 111,500 a tonne a year ago. Not just margins, even realisation fell to Rs 47,450 a tonne from Rs 66,500 a tonne. The producers, in fact, suffered a double-digit fall in realisation till May 2009 and witnessed a smart recovery thereafter. The decline in margins was 4-1 per cent in June, July and August 2009 as caprolactam prices improved from Rs 89,500 a tonne in May to Rs 111,500 a tonne in August.
| FACT SHEET |
| Quarter |
Benzene |
Caprolactam |
Margin |
| Oct-Dec ’07 |
46,083 |
1,12,000 |
65,917 |
| Jan-Mar '08 |
45,783 |
1,12,500 |
66,717 |
| Apr-Jun ‘08 |
53,433 |
1,19,167 |
65,733 |
| Jul-Sept ‘08 |
61,817 |
1,27,667 |
65,850 |
| Oct-Dec ‘08 |
40,383 |
1,04,500 |
64,117 |
| Jan-Mar ‘09 |
22,200 |
72,667 |
50,467 |
| Apr-Jun ’09 |
33,433 |
87,833 |
54,400 |
| July-Sept ‘09* |
40,919 |
1,09,167 |
68,247 |
* Average price till September 7 Figures in Rs per tonne
Note: PM Margin is the excess of Caprolactam prices over benzene prices |
Gujarat State Fertilizers Corporation (GSFC) and Fertilisers & Chemicals Travancore (FACT) are the only two Indian companies manufacturing caprolactam. Together, they account for 3 per cent of the world’s total caprolactam production. While GSFC has a 70,000-tonne capacity, FACT has a capacity of 50,000 tonnes.
GSFC had faced an erosion in its margins with realisation from caprolactam declining to Rs 95,109 a tonne in 2008-09 from Rs 103,681 a tonne in 2007-08.
George Sleeba, chairman and managing director (CMD) of FACT, said: “Caprolactam margins are certainly improving, but we are not generating enough revenue from the by-product, ammonium sulphate, as our cost of production is higher.”
Caprolactam is the principal raw material for Nylon 6, and is used for producing Nylon Filament Yarn (NFY) and Nylon Tyre Cord Fabric (NTCF). The compound is also used in brush bristles, textile stiffeners, film coatings, synthetic leather, plastics, plasticizers and cross-linking for polyurethane.
Caprolactam demand from automobile and textile manufacturers has been rising as they have started reaping the benefits of the green shoots of recovery. These manufacturers use caprolactam for the production of nylon yarn and tyre cord.
In the first week of the current month, the prices of caprolactam moved up to Rs 117,000 from Rs 111,500 a tonne in the previous month due to the increase in international prices.
The domestic production of caprolactam grew by a robust 28 per cent from 8,203 tonnes in June 2008 to 10,499 tonnes in June 2009. The growth could be attributed to the low base due to FACT temporarily halting its production in mid-June 2008. Production of the compound also grew by 27 per cent sequentially from 8,255 tonnes in May 2009. In the quarter ended June 2009, the production grew by 9 per cent to 27,143 tonnes from 24,798 tonnes in the June quarter of 2008.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
