Caprolactam’s Status and Prospects – an Analysis

By Li Yufang and Wu Xiaoming, Beijing Jiangning Chemical Technology Research Institute

(Continued page 22, issue 2, CCR, 2014)

2. Production and sales of CPL in China

(1) Present production capacity
The commercial production of CPL in China started in the late 1950s. In the early 1990s, China introduced two CPL units using technology from DSM of the Netherlands. Then, Sinopec independently developed its own cyclohexanone ammoximation technology. CPL production in China, therefore, has developed rapidly, with quite a few new units and expansion projects being completed and going on stream here in recent years.
By the end of August 2013, the number of CPL producers in China had already increased to eight and the total capacity had reached 1.415 million t/a. Except for a 65 kt/a unit of Sinopec Shijiazhuang Chemical Fiber Co., Ltd. that uses the toluene process, all units use cyclohexane as raw material. Sinopec Baling Petrochemical Co., Ltd. is the biggest producer, and its capacity is 300 kt/a, accounting for 21.2% of the domestic total. Table 1 shows the major CPL producers in China in 2013.

Table 1    Major CPL producers in China, 2013 (kt/a)

Producer    Capacity    Starting raw material and technology
Sinopec Baling Petrochemical Co., Ltd.     300     
cyclohexane; using the DSM/HPO process in the past; expansion conducted in 2003, 2010 and 2012 with  its own technology
DSM Nanjing Chemical Co., Ltd.     200    
cyclohexane; using the DSM/HPO process in the past; expansion conducted in 2005 with the DSM/HPO process; further expansion conducted twice in 2009 and 2010
Sinopec Shijiazhuang Chemical Fiber Co., Ltd.     165    
two units; the first 65 kt/a unit using toluene as raw material and technology from SniaViscosa of Italy; the second unit constructed in 2009 and using cyclohexane as raw material
Zhejiang Juhua Group Co., Ltd.    50    
cylcohexane; using domestic technology; expansion conducted in 2011 and 2012
Shandong Bohui Haili Chemical Industry Co., Ltd.     200    
cylcohexane; recently constructed in 2012
Baling Hengyi Caprolactam Co., Ltd.     200    
cyclohexane; using technology from Sinopec; recently constructed in 2012
Shandong Fangming Chemical Co., Ltd.     100    
cyclohexane; using technology introduced from abroad; recently constructed in 2012
Hubei Sanning Chemical Co., Ltd.     200    
cyclohexane; recently constructed in 2013
Total     1 415    


Table 2    Supply and demand of CPL in China in recent years (kt, %)

Year    Output    Import volume    Export volume    Apparent consumption    Self-sufficiency
2005      212    493       2    703        30.2
2006      291    445       0.3    736        39.5
2007      302    473       0.3    775        39.0
2008      290    450       2    738        39.3
2009      340    601       2    939        36.2
2010      494    631       1    1 124    43.9
2011      537    633       8    1 162    46.2
2012      715    707       5    1 415    50.5
H1 2013       -    221       1    -         -


(2) New units and expansions
The serious capacity shortage and considerable demand-supply gap of CPL, and the fast growth and high return of related sectors have triggered an upsurge in the construction of CPL units. Quite a few new CPL units and expansion projects will be completed and go on stream in China during 2013-2017. Sinopec Baling Petrochemical Co., Ltd. plans to use second-generation green production technology to construct a 100 kt/a commercial demonstration unit, increasing its total CPL capacity to 400 kt/a. Sinopec Shijiazhuang Refining & Chemical Co., Ltd. plans to expand the capacity of its existing CPL unit to 200 kt/a. DSM Nanjing Chemical Co., Ltd. (joint venture of DSM and Sinopec) plans to use the latest technology of DSM to construct a 200 kt/a CPL unit. The unit will start production in 2013, bringing the company’s total CPL capacity to 400 kt/a.
Shandong Luxi Chemical Group Co., Ltd. plans to construct a 200 kt/a CPL unit, which will be executed in two phases and fully completed in 2015. Shanxi Lanhua Kechuang Co., Ltd. is building a 200 kt/a CPL unit in Jincheng of Shanxi; construction was started in April 2012 and the project will be completed in March 2014. Fuqing Tianchen Yaolong New Material Co., Ltd. plans to construct a 200 kt/a CPL unit. The project is jointly funded by China Tianchen Engineering Corporation and Fuzhou Yaolong Chemical Group Co., Ltd. Construction was started in Fuqing Jiangyin Industry Park of Fujian in May 2012 and the project will be completed at the end of 2013. China Pingmei Shenma Group held the groundbreaking ceremony for a 200 kt/a CPL project in Pingdingshan Chemical Industry Cluster Zone in August 2012. The project will be executed in two phases and completed in 2016.
In July 2012, Changle Highsun Synthetic Fiber Technology Co., Ltd. and DSM of Netherlands reached an agreement to construct a 1.0 million t/a CPL unit in Fujian. Sichuan Chengda Chemical New Material Co., Ltd. will construct a 200 kt/a unit. Zhejiang Sanding Holding Group Co., Ltd. plans to construct a 500 kt/a CPL in Beilun District of Ningbo. Abel (Jiangsu) Chemical Co., Ltd. will construct a 100 kt/a unit in Taixing Economic Development Area. Inner Mongolia Qinghua Group Co., Ltd. will construct a 200 kt/a CPL unit in Alxa (close to Wuhai city). Shandong Heze Dongju Chemical Co., Ltd. plans to construct a 100 kt/a unit. Chongqing Changshou Economic and Technical Development Area will construct a 200 kt/a unit. Shandong Huamao New Material Co., Ltd. plans to construct a 100 kt/a unit. Yangquan Coal Industry Group Co., Ltd. plans to construct a 200 kt/a unit. Anhui Tongling Chemical Industry Group Co., Ltd. plans to construct a 200 kt/a unit. Erdos Jianyuan Coal Coking Co., Ltd. plans to construct a 200 kt/a unit. If these projects are completed according to plan, the total CPL capacity in China is expected to exceed 4.00 million t/a in 2017, and China will become the most important CPL producer in the world.
(3) Present consumption status
With the rapid development of nylon fiber, cord fabric and polyamide engineering plastic sectors, the demand for CPL in China has increased constantly in recent years. The apparent consumption of CPL in China was 703 kt in 2005 and increased to 1.124 million tons in 2010 (up 19.7% from 2009). In 2012, the apparent consumption reached 1.415 million tons, an increase of 21.7% over the previous year. The average annual growth of apparent consumption during 2007-2012 was 4.0%. Self-sufficiency also climbed, reaching 50.5% in 2012. Table 2 shows the supply and demand of CPL in China in recent years.
In China, CPL is mainly used to produce nylon 6 fibers and nylon 6 engineering plastics. The demand of CPL in nylon 6 fibers accounts for around 80.0% of the total. Major non-fiber applications of nylon 6 include engineering plastics (mainly cast-molded components used in automobiles and electric appliances) and biaxially oriented nylon films, and the demand from CPL makers accounts for around 18.0%.

Table 3  Import and export of CPL in China in recent years

Year    Import    Export
    Import volume (kt)    Average import price (US$/t)    Export
volume (t)    Average export price (US$/t)
2005    493    2175.6    2039.0    2174.2
2006    445    1990.1    34.0    6153.2
2007    473    2330.0    27.8    3238.3
2008    450    2409.0    2006.0    2274.5
2009    601    1627.2    1611.0    2025.0
2010    631    2470.9    586.0    2733.3
2011    633    3254.1    7580.0    3517.8
2012    707    2566.9    6429.6    2708.6
First half of 2013    221    2399.1    1040.1    2542.9


With the stable and rapid development of the national economy, the demand for nylon 6 fibers in the textile, automotive, electronic and communication sectors also keeps going up. China has vigorously expanded nylon 6 fiber polymerization capacity in recent years, promoting the constant increase of CPL demand. As the proportion of nylon 6 among the raw materials in China’s engineering plastics and films is far lower than in advanced countries, this application of CPL has huge development potential. It is expected that the total demand for CPL in China will reach 1.80-1.85 million tons in 2017.
(4) Import and export
With the rapid development of the national economy, the demand for CPL in China has increased constantly and great quantities have to be imported. Despite China taking antidumping measures twice, in 2003 and 2011, the import volume of CPL saw no reduction, due to the strength of demand. The import volume reached 707 kt in 2012. Small amounts of CPL are also exported from China. Table 3 shows the import and export of CPL in China in recent years.
Major import sources include the United States, Russia, Japan, Mexico, Belarus and Belgium. The amount imported from these six countries in 2012 reached 532 kt, accounting for around 75.3% of the total import volume, an increase of 14.7% over the previous year.
(5) Import price
The import price of CPL in China increased year-by-year during 2006-2008. It reached US$2 409.0/t (CIF price excluding tax, the same below) in 2008. With impacts from the global financial crisis, the import price fell drastically in 2009. The world economy recovered after 2010, and the import price of CPL recovered along with it, reaching US$3 254.1/t in 2011. Due to factors such as the oil price decline and the European debt crisis, the demand for CPL in downstream sectors became slack in 2012. The import price came down once again in 2012, to US$2 566.9/t, a drop of 6.5% from the previous year. The average import price was US$2 399.1/t in 2013 (January to June), down 12.3% year-on-year.
(6) Market price
The market price of CPL in China is mainly influenced by the price of raw material pure benzene and the demand from makers of polyamide. Overall, the market price of CPL in China has decreased constantly in recent years. Owing to a price rise of pure benzene and the gradual recovery of demand, the market price of CPL increased a bit in January and February 2013, reaching RMB20 100/t in February. A gradual price decline followed. The market price was RMB18 200/t in August. With the completion of new CPL units by enterprises such as Hubei Sanning Chemical Co., Ltd., the market price of CPL is unlikely to increase significantly.

3. Problems and suggestions

(1) Be cautious about constructing new projects and prevent capacity surplus
The capacity and the output of CPL in China still cannot meet the market demand, and great quantities of CPL have to be imported. Soon however, the completion of quite a few new units and expansion projects will turn capacity shortage to surplus, the profitability of CPL producers here will be weakened and market competition will be intensified. In addition to the risk of overcapacity, the investors should consider the complexity and high investment inherent in CPL projects and assess the linkages with downstream and upstream industries. It is preferable to contain risks by setting up a joint venture. Judging from the status of the raw material supply, it is still best to adopt the cyclohexane process in China.
(2) Optimize production distribution and enhance competitiveness
The regional distribution of CPL plants is not rational in China. Most are far from major consumption regions. Major polyamide makers need to import great quantities of CPL and nylon chips each year. Moreover, as some producers have not yet formed complete industrial chains, the freight cost is unduly high, and the competitiveness of such producers is weak. Adjustments should be made to the industrial distribution. It is advisable to construct CPL units in regions with considerable midstream and downstream clients, such as Fujian, Guangdong, Jiangsu and Zhejiang.
(3) Accelerate research into applications and expand the CPL market
There is a big opportunity to use more CPL in high-end high-speed spun yarns in China. The development of nylon chip usage in high-grade halogen-free flame-retardant carpet yarns and food packaging films is inadequate too. Most of the high-performance nylon 6 products are supplied by foreign companies. It is suggested that the government support and organize nylon 6 producers with strong technical development abilities to cooperate with research institutes and jointly develop new nylon 6 varieties that can replace imported products, increase market shares of domestic nylon 6 products, seek new application sectors of nylon fibers and expand the market demand for CPL.
(4) Speed up the commercialization of localized technologies
Through many years of effort, considerable advances have been made in the development of Chinese CPL technologies. Based on the assimilation of the toluene process, Sinopec Baling Petrochemical Co., Ltd. successfully developed technology for CPL production through cyclohexanone ammoximation, which shortens the process flow, simplifies operation, minimizes environmental impact and lowers production costs. The new hydrofining technology for CPL production has greatly reduced production costs. Besides, on the basis of the vapor-phase rearrangement technology generating no byproduct ammonium sulfate, considerable progress has also been made in the toluene-process reaction optimization technology and the heterogeneous oximation technology. Efforts should be made to speed up the application of these new technologies in commercial production units so as to achieve clean production, minimize production costs, optimize production processes and enhance market competitiveness.
(5) Upgrade environmental protection standards and promote sound development of the CPL sector
The research, development and application of new technologies for energy conservation and emission reduction in CPL production should be strengthened to save energy, reduce cost, minimize environmental pollution and achieve green production. Standards for CPL varieties used in different markets should also be revised. Standards for environmental protection in CPL production should be formulated. A level playing field should be created to ensure healthy development of the CPL sector in China.