Plastic Recycling in the USA / China Markets: March 2011

Wednesday, March 23, 2011

Talk about “March Madness” prime Caprolactam (CPL) reaches $3520-$3560/MT in China

The price of prime Caprolactam (CPL) is now trading above $3500/MT delivered in the Asian market. This is a historically high price for prime CPL that is being driven by Broker/Traders speculating on continued price increases for the product. The contract price for prime CPL settled in between $3520 - $3560/MT ($1.597-$1.615/lb.) for the month of March, 2011. We feel this price increase is still being driven in China by the Traders/Brokers, because we do not see enough demand in the Asian PA6 market to support the latest CPL price increase. Our big concern at this time is that we are starting to see the factories in China starting to slow down again, as they did in early 2008 before the correction that started in October of that year.

Another factor that is going to affect the Nylon 6 market in the short run is the disaster in Japan. Japan produces about 25% of the CPL that is sold in Taiwan, and 13-15% of the CPL that is sold in China. The plants in Japan are down at this time due to disruptions in the supply chain, a lack of power to run the plants, and delays in their transportation system. In the short run this means that prime CPL prices will most likely go up again in April, and may even reach the $3700/MT ($1.678/lb.) price level. This is not good news, because at some price point in time the manufacturers around the world will stop buying Nylon 6 until they start to see some price softening. The Japanese CPL supply disruption may only be a 60-90 day scenario, but it is going to have a drastic impact on the price of prime Nylon 6 in the short run.

At this point I do not see the price of Nylon 6 softening in Q2 2011 as I have previously mentioned. Based on the March contract price for CPL large buyers of prime Nylon 6 are now paying somewhere north of $1.50/lb. for material in the USA. It costs the average PA6 producer around $.08-$.10/lb. to polymerize the CPL and make pellets, so your guess is a good as mine as to where Nylon 6 prices will go in April / May if CPL increases to $3700/MT. We are actually buying all of the WS PA6 that we can at this time, because we think prices will only increase again in April due to the for mentioned crisis in Japan.

The Nylon 66 market still shows no signs of softening at this time as well. Both of the domestic PA66 producers are sold out, and material feedstock prices only seem to keep going up. The price of Butadiene has gone through the roof due to tight world supply, which may lead to another round of price increase in the secondary PA66 market. Get ready guys inflation is at our front door and starting to show its ugly face, which will only have a negative impact on our already fragile US economy.

The Acrylic (PMMA) market has started to stabilize somewhat in the USA, and scrap prices may actually stay flat for 30-60 days. Depending on what the price of Acetone does in the domestic market it will determine if we see the price of MMA / PMMA increase in the short run.

Dualloy currently has the following Nylon (PA6) and Nylon 66 (PA 66 materials for sale:

Nylon 66 Bright w/HS Pellets

Nylon 66 Semi Dull Wide Spec Pellets

Nylon 66 Dull Second Quality Pellets

Nylon 66 Textile Bright Pellets

Nylon 66 Pellets w/ up to 0.02% TiO2

Nylon 66 Mixed Color Regrind

Nylon 66 Bright Regrinds

Nylon 66 Semi Dull / Mixed Luster Regrind

Nylon 6 Nat w/HS– Wide spec (off-grade) Pellets

Low to medium viscosity, 5% monomer, heat stabilized. The material has moisture issues, and it might have a few black specs and bad cut pellets. The material is in unsealed poly liners.

Prime Nylon 6 Pellets 2.7 RV - Natural

Packaged in 1,500# boxes

Dualloy sells the following types of low end Caprolactam / Nylon 6 waste.

Nylon 6 Kettle Bottoms

Nylon 6 Depoly Residue

Nylon 6 Solidified Oligomer Waste

Call for MOQ and current material prices.

Dualloy purchases/sells plastic resin and polymers in the following forms.

Aged/Obsolete Virgin Pellets

Wide-Specification Pellets

Clean uniform Plastic Regrinds

Reactor Lumps/Chunks/Patties

Nylon Fiber Bales

Please feel free to contact me at: JamesGubera@dualloy.com

Tuesday, March 1, 2011

Nylon 66 (PA66) and Nylon 6 (PA6) prices continue to increase in February 2011

The price of both Nylon 66 and Nylon 6 wide specification (WS) pellets and scrap was up again in February 2011. There are currently several factors driving these world wide price increases for commodities and plastics. Of course the main factor driving all of the price increases is the emerging markets in India and China. The price of cotton is at the highest level it has been since 1870 during the Civil War. The contract price for a pound of cotton is around $1.198/lb., with cotton futures trading in the $1.936/lb. price range at this time. (Please see the attached Wall Street Journal article.)

http://online.wsj.com/article/SB10001424052748704300604575554210569885910.html

With Oil hovering around $98/ barrel this price will continue to drive up, or support the current high cost of all plastic feedstocks and intermediaries. Between the high price of cotton and oil it is putting pricing pressure on all synthetic fibers (PA66, PA6, PET), and will support the current PA66, PA6 pricing levels through mid-2011.

The price of Nylon 66 WS pellets was up in February, and we are expecting to see another $.05/lb. increase in March. Invista has declared force majeure due to the cold weather in Texas, which has caused outages at their PA66 intermediary plants in Orange and Victoria. All of Invista’s prime customers are on allocation due to the tight supply of material feedstocks. Ascend had announced a $.15/lb. price increase for February, and we expect to see them follow up with a $.05-$.06/lb price increase in March. Rhodia is still under force majeure in Europe, so don’t expect to see the price of PA66 start to soften any time soon.

Caprolactam (CPL) was selling in China on contract in the $3220/MT range in February, with traders driving the price as high as $3500/MT. The high price of CPL is going to keep the price of Nylon 6 up in the short run, because the domestic CPL producers would rather make flake and send it to China if they cannot get over $1.40/lb. for their prime PA6 resins in the USA market. The PA6 market is over heated at this time, but does not show any signs of letting up in the short run. We still think that the PA6 market will soften before mid-2011.

Acrylic (PMMA) is continuing to go up in price like all other plastic materials. We have just been asked for a $.02/lb. price increase for the PMMA scrap and regrinds that we are currently buying on a monthly basis. The USA MMA producers have declared force majeure due to the 3 days of extreme cold weather along the Texas Gulf Coast in February. The contract price of MMA is around $.82-$.84/lb. ($1800/MT), with MMA selling in the spot market around $.95/lb. ($2100/MT) in late February. Most of the domestic PMMA producers are back to running close to capacity due to stronger export sales in 2010 and early 2011. We expect to see this market to be more stable in 2011 with PMMA scrap prices staying at their current levels, or moving slightly higher as the year progresses.

Please see the Nylon 66 below that we currently have available for sale/ delivery in March 2011.

2 loads Nylon 66 dull wide spec pellets
2 loads Nylon 66 semi dull pellets
2 loads Nylon 66 bright regrind
2 loads Nylon 66 semi dull or mixed luster regrind,
1 load Nylon 66 mixed luster pellets with possible black specs
1 load Nylon 66 wet sweeps
1 load Nylon 66 dry sweeps
4 loads Nylon 6 Prime 2.7 RV pellets

Please let me know if your compounding division has an interest in purchasing any of the material listed above. All prices are subject to change without notice. All materials offered are subject to prior sale.

Dualloy is looking to increase our supply of Chrome Plated Plastic Scrap that is generated from manufacturing bathroom products, sanitary ware, automobiles, and from window locks/latches.

Dualloy purchases all types of scrap from Chrome Plating Plastics, and are looking for more suppliers of baled and crushed materials.

Dualloy Purchases the following Chrome Plated Plastic Scrap:

Sanitary Ware / Bathroom Products

Automotive: Mirrors, Trim, Grills, Door Handles

Window Locks / Latches

Please give us a call is you have Chrome Plated plastic scrap and waste that you need to sell.

Dualloy also purchases the following types of wide specification pellets and plant scrap.

Nylon 66 (PA 66) Polyamide 66

Nylon 6 (PA 6) Polyamide 6

Polyvinyl Butyral (PVB)

Acrylic (PMMA)

Dualloy sells the following types of Nylon 6 Polymer waste.