Buyers could soon find themselves having to accept higher prices.
Nylon 6 supply is tightening in November in Europe as some buyers say they are struggling to find extra volumes.
The reason for the shortage is attributed to ongoing good demand and recent production issues.
A tighter market should support producers to achieve higher prices in the next round of contract negotiations.
Nylon 6 (PA6) demand had decreased considerably after the first wave of the coronavirus.
But lately, as producers reduced operating rates and demand recovered, the market has balanced out.
What is more, the recent increase in benzene prices added further upward pressure.
Nylon 6 is getting tighter not only because of an increase in demand but also because of production issues.
Several players said that a major producer had declared force majeure on PA6. This was reportedly due to issues encountered during the restart after maintenance.
However, for now, the tightness has for sure lowered spot availability which had been causing oversupply. But it remains to be seen if the tightness will start to hit the rest of the market.
If demand continues to perform well as it has since the end of the summer, then buyers will start to see prices climb across the board.
While rollovers are still possible in November, there is little doubt that producers’ chances of implementing price increases in November have increased.