Japanese Chemical Trader blog

Japan Chemical Trading Blog

Caprolactam

On April 28, Ube Industries announced the downward revision of earnings forecast for the previous fiscal year (April, 2013 – March, 2014).

Though shipments of cement and ready-mixed concrete was buoyant thanks to robust domestic sales lead by reconstruction demands, etc., it did not offset the declining performance in the chemical products.

The slump, while the weaker yen has served as a spur to profits, shows the chemicals segment has been in a severe situation.

Caprolactam, their main product, is used as raw material for nylon.
Last year Chinese manufacturers increased production capacity for approx. 700,000 ton which is 15% of world demand, so that the prices have been faltering.

Last month Ube stopped production of caprolactam at the Sakai Factory, Osaka, which has a relatively low competitiveness among their production bases.