By Song Chao, Yueyang Changlian Chemical Co., Ltd.

CPL: The capacity makes further rapid expansion

By the end of 2017 the capacity of CPL (caprolactam) in China reached 3 470 kt/a, an increase of 700 kt/a over 2016. New capacities mainly came from the completion of the first-phase 200 kt/a new unit in Fujian Shenyuan New Materials Co., Ltd. at the end of July 2017 and the second-phase 200 kt/a new unit in the company in November, the completion of the 100 kt/a new unit in Lubao Group Xinghai New Material Co., Ltd. at the end of September, the completion of the second-phase 100 kt/a new unit in Yangmei Chemical Co., Ltd. at the end of October and the expansion of the 200 kt/a unit in Zhejiang Baling Hengyi Caprolactam Co., Ltd. to 300 kt/a through debottlenecking and renovation at the end of November. Table 1 shows the capacities of CPL producers in China in 2017.

Table 1   Producers of CPL in China

   The capacity of CPL in China will still present a trend of stable increase in 2018. It is expected that by the end of 2018 the capacity of CPL will reach 3 970 kt/a and the growth will be 12.6%. With the rapid capacity growth, the output of CPL will also make a stable pickup. The average annual growth was 17.7% for the capacity, 16.8% for the output and 10.1% for the apparent consumption during 2013-2017. The average annual growth of both the capacity and the output was higher than that of the apparent consumption. The output of CPL in China was 2 180 kt in 2017, an increase of 14.0% over the previous year. The apparent consumption was 2 412 kt, an increase of 13.1%. With impacts from policies for environmental protection and the supply reduction of raw material cyclohexanone, the import amount of CPL was 237 kt in 2017, being the highest level in past 4 years. The import dependence came down from 27.55% in 2013 to 9.6% in 2017. Table 2 shows the supply/demand of CPL in China during 2013-2017.

Table 2   Supply/demand of CPL in China during 2013-2017

   The import of CPL in China mainly comes from Russia, Belgium, Japan and Poland. Russia is the biggest CPL import source and the amount imported in 2017 was 109 kt, accounting for around 46% of the total import amount. High-quality CPL imported by China in 2017 was around 95 kt, accounting for around 40% of the total import amount. High-quality CPL was mainly imported from Japan, Belgium, Thailand and Netherlands.

Adipic acid: The capacity growth is much slowed down

   By the end of 2017 the capacity of adipic acid in China was 2 260 kt/a and the growth was much slowed down. Table 3 shows the producers of adipic acid in China in 2017. It is expected that the adipic acid market in China will still have oversupply in next few years. At the time when new capacities are released, existing units with no strong competitiveness will likely shut down or reduce production load.

Table 3   Producers of adipic acid in China

   With impacts from policies for environmental protection, adipic acid units in Shandong Haili Chemical Industry Co., Ltd., Shandong Hongye Chemical Group Co., Ltd. and Xinjiang Dushanzi Tianli High-Tech Co., Ltd. were in a state of shutdown for overhaul in the whole year of 2017. The operating rate of the adipic acid industrial chain was therefore quite low in 2017, being 57.8%. The output of adipic acid was 1 306 kt, an increase of 4.3% over the previous year. The import amount was 18 kt. The export amount was 344 kt, an increase of 15.5% over the previous year. The apparent consumption was 980 kt and the self-sufficiency rate reached 133.2%. Capacity surplus was quite serious. Table 4 shows the supply/demand of adipic acid in China during 2013-2017.

Table 4   Supply/demand of adipic acid in China during 2013-2017

   The import of adipic acid in China mainly comes from Korea, Germany and Japan. The amount imported from these 3 sources in 2017 accounted for 94.2% of the total import amount. Destinations for the export of adipic acid in China are quite scattered. They mainly include Singapore, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu and Turkey. It is expected that in face of fierce competition in the domestic market the export proportion of adipic acid will go further up in next few years.

Adipic diamine: The technology for raw material adipic dinitrile is not yet conquered

   As the production technology for raw material adipic dinitrile is not mastered, the development of adipic diamine in China is slow today. There are only 3 adipic diamine units. They are the 140 kt/a unit in Pingmei Shenma Group, the 28 kt/a unit in Anshan Guorui Chemical Co., Ltd. and the 215 kt/a unit funded by Invista in Shanghai. The total capacity is 383 kt/a. Raw material adipic dinitrile is totally purchased from abroad.
   Regarding the commercial production of adipic dinitrile, the 100 kt/a adipic dinitrile unit constructed by Shandong Runxing Group with the process of acrylonitrile electro-synthesis made trial production in August 2015, but the production has been suspended up to now due to explosion. Invista plans to construct a 300 kt/a adipic dinitrile unit in Shanghai Chemical Industry Park. It is expected that the capacity of adipic dinitrile in China will reach 300 kt/a in 2020 and the status of supply shortage will be eased to a certain extent at that time.

PA6 chip: The capacity maintains a quite high growth

   With the rapid capacity expansion of upstream raw material CPL, the polymerization capacity of downstream PA6 chip has also maintained a quite high growth. The capacity of PA6 chip in China was around 4 090 kt/a in 2017, an increase of 12.7% over the previous year. New capacities included 30 kt/a in Jiangsu Haiyang Chemical Fiber Co., Ltd., 165 kt/a in Zhejiang Hengyi Group Co., Ltd., 100 kt/a in Jiangsu Yongtong New Material Technology Co., Ltd., 70 kt/a in Pingdingshan Sansuo Nylon Development Co., Ltd., 110 kt/a in Sinolong Plastic (Fujian) Co., Ltd. and 100 kt/a in Yangmei Group Taiyuan Chemical New Material Co., Ltd. Table 5 shows the major producers of PA6 chip in China in 2017.

Table 5    Major producers of PA6 chip in China

    There will still be a new PA6 chip capacity of around 460 kt/a in China in 2018. It is expected that the capacity of PA6 chip in China will reach over 4 600 kt/a at the end of 2018.
   The output of PA6 chip in China was 2 420 kt in 2017. The import amount was 364 kt and the export amount was 105 kt. The import amount made a sustained reduction whereas the export amount presented a trend of year-on-year increase. The apparent consumption was 2 679 kt, an increase of 7.3% over the previous year and being higher than the average annual growth of 5.4% during 2013-2017. Table 6 shows the supply/demand of PA6 chip in China during 2013-2017.

Table 6   Supply/demand of PA6 chip in China during 2013-2017

PA66 salt and chip: The supply/demand pattern has huge changes

   With constraints from raw material adipic dinitrile, the development of the PA66 sector in China was always slow and there was serious capacity shortage. Only after the 215 kt/a adipic diamine unit and the 150 kt/a PA66 chip unit funded by Invista in Shanghai started production in 2016 did changes in the supply pattern of PA66 chip in China appear. The capacity of PA66 chip in China was 476 kt/a in 2017, an increase of 46.2% over 2013. Table 7 shows the producers of PA66 salt and chip in China.

Table 7   Producers of PA66 salt and chip in China

   The output of PA66 chip in China was 401 kt in 2017, the export amount was 76 kt, the import amount was 271 kt, the apparent consumption was 595 kt and the import dependence was 45.5%. The average annual growth was 22.7% for the output and 10.5% for the apparent consumption during 2013-2017. Table 8 shows the supply/demand of PA66 chip in China during 2013-2017.

Table 8   Supply/demand of PA66 chip in China during 2013-2017

PA6 fiber: Initial signs for reshuffling show up

   As the bottleneck for the domestic supply of raw material CPL was broken and the raw material self-sufficiency rate made a drastic pickup during 2013-2017, the capacity of PA6 fiber (including civil filament yarn, tire cord fabric, fishing net yarn and staple yarn) made a constant increase from 2 670 kt/a in 2013 to 3 500 kt/a in 2017 with an average annual growth of 7.0%. A group of leading enterprises including Changle Hengshen Synthetic Fiber Technology Co., Ltd., Fujian Jinjiang Technology Co., Ltd., Guangdong Xinhui Meida Nylon Co., Ltd., Yiwu Huading Nylon Co., Ltd. and Changle Kaibang Nylon Co., Ltd. were gradually formed. Competition in the PA6 fiber sector was however aggravated. Some outdated capacities in medium/small enterprises with a capacity of 10-30 kt/a were phased out. Initial signs for reshuffling have shown up. Table 9 shows the producers of PA6 fiber with a capacity of over 100 kt/a in China in 2017.

Table 9  Producers of PA6 fiber with a capacity of over 100 kt/a in China in 2017

  Producers of PA6 fiber in China today are mainly concentrated in several important nylon industry clusters such as Changle of Fujian and Yiwu and Zhuji of Zhejiang. There are 12 nylon producers with a considerable scale in Changle of Fujian and the capacity of PA6 fiber is around 600 kt/a. Changle of Fujian is the biggest production base of PA6 chip and PA6 civil filament yarn in China.
   In terms of downstream application, owing to outstanding features of PA6 fiber such as great tenderness, light mass, abrasion resistance and good resilience, its demand in the market of textiles and clothes is making a constant increase. As both the domestic demand and the overseas demand of textiles have made a reduction in recent years, the demand growth of conventional PA fibers is slowed down. Nevertheless, benefitted from advances in polymerization and spinning technologies, the product differentiation rate in the PA6 fiber sector has made a drastic increase. Various high-tenacity, fine-denier, perforated, profiled and dope-dyed differential PA6 fiber varieties have appeared. The product differentiation rate went up from 57% in 2013 to around 64% in 2017.

Engineering plastic and film sector: PA6 holds a high proportion

   The average annual growth of PA6 chip in the engineering plastic and film sector (including engineering plastics, BOPA film, PA rod and PA glue) was 5.1% during 2013-2017, being lower than the average annual growth of PA66 chip in the engineering plastic sector (12.1%).
   The consumption of PA6 chip and PA66 chip in the engineering plastic and film sector was respectively 589 kt and 395 kt in 2017. PA6 chip remains to be the leading raw material for PA engineering plastics. Table 10 shows the consumption of PA engineering plastics in China during 2013-2017.

Table 10  Consumption of PA engineering plastics in China during 2013-2017  (kt)

Future development needs to be driven by four wheels

   The polyamide industrial chain in China has maintained an overall development trend of stableness with headway and stableness with quality upgrading. Challenges faced by the industrial chain are however still severe. In terms of PA6, it is expected that raw material CPL will have greater capacity release in next few years and the release speed will be much higher than the growth of downstream polymerization and spinning. Competition in the entire PA6 industrial chain will therefore be fiercer. In terms of PA66, with the completion of the unit funded by Invista the supply status will be somewhat improved. Nevertheless, the bottleneck in the production technology for adipic diamine is yet not broken and the status of the market being monopolized by large multinationals has made no change.
   With the output increase and the quality upgrading of CPL and adipic acid, increasing export and expanding overseas markets have become a market breakthrough for solving the problem of capacity surplus. R&D should be strengthened, and product performance should be improved. Restructuring should be accelerated and industrial chain should be extended. Efforts have to be made to actively expand towards downstream and shift from product suppliers to service providers.