The Indian caprolactam prices, main raw material for nylon 6, reported marginal increase of Rs 1000 per tonne i.e. 1% m-o-m to Rs 137500 per tonne in October 2010 due to steady international prices driven by stable international demand. The Indian caprolactam prices follow the international caprolactam prices with a month's lag. On year on year basis, the domestic caprolactam prices grew by 24% y-o-y from Rs 111000 per tonne in Oct 09.

At the domestic waters, the caprolactam demand is robust thanks to the impressive auto demand. The Indian auto industry has been posting milestone production of 1.47 milllion vehicles in July 2010 and 1.49 million vehicles in August 2010. This indirectly benefits the caprolactam industry as close to 60% of caprolactam is utilized in production of nylon tyre cord fabric (NTCF), a raw material for tyres while 45% of tyre sales are to original equipment manufacturers (OEM) i.e. auto manufacturers. With the auto production expected to get only better in ongoing festive season, the caprolactam industry would indirectly benefit.

The domestic benzene price, main raw material for caprolactam, grew by 6% m-o-m while fell by 5% y-o-y to Rs 45400 per tonne in October 2010. This was reflected in margins as robust 46% y-o-y growth to Rs 92100 per tonne in October 2010 while it fell by flat 2% m-o-m from Rs 93650 per tonne in September 2010.

In India, GSFC and FACT are the only caprolactam manufacturers. GSFC uses natural gas as feedstock while FACT utilizes naphtha. The total installed capacity of caprolactam in GSFC is 70000 TPA and in FACT is 50000 TPA in financial year 2008-09.