By Zhang Li, Petroleum and Chemical Industry Planning Institute

Global polyamide 6 (PA6) capacity totaled 8.75 million t/a and output (consumption) was 6 million tons in 2018, reflecting an average plant utilization rate of 69%. Most producers were focused on the production of PA6, while some produced PA66 and a small amount of specialty nylon. The capacity is expected to hit 12.25 million t/a in 2025 globally, while the consumption will grow at approximately 4.1% on an annual basis during 2018-2025, giving rise to an average plant utilization rate of about 65%.

   Chinese PTA polymerization capacity totaled 5.37 million t/a in 2018, with PA and PT66 occupying the lion’s share while the capacity of specialty PA and bio-based PA less than 200 kt/a. The domestic PA consumption amounted to 4.2 million tons in 2018, reflecting a self-supply rate of 87%. Of the figure, engineering nylon consumption was at 810 kt, with a self-supply rate of 67%. Chinese PA6 capacity will keep expanding in the near term, adding to the global market. 

   Global PA6 consumption was about 6 million tons in 2018, and fiber, the major derivative of PA6, consumed 4.08 million tons, accounting for 68% of the total consumption, while engineering plastics (including film) digested about 1.92 million tons, taking up 32% of the total. Fiber will remain as the key derivative of PA in the future, while in a long run, engineering plastics will have greater market potential and higher added value.

Large-sized integration plants to be favoured

   Chinese PA6 capacity was at 4.5 million t/a and the output at 3.17 million tons in 2018. There were more than 50 PA6 producers, 12 of which had a capacity of 150 kt/a each and their total capacity amounted to 2.37 million t/a, taking up 53% of the domestic total. Table 1 shows the list of domestic PA6 producers in China with capacities above 100 kt/a in 2018. In it, it’s heard that the newly-built capacities were mostly from civil spinning chip, but high-speed spinning chip capacities grew rapidly.

  Table 1   Chinese PA6 producers with over 100 kt/a capacity 2018

   Of China’s PA6 production, fiber grade takes up about 85% while engineering plastics and film chip account for 15% or so. All of the production is based on continuous polymerization technology. More than 90% of the producers are private-owned. Most of the plants are concentrated in south and east China, respectively accounting for 47% and 45% of the total capacity. In recent years, producers are favoring large-sized integration complexes to produce PA6. 

   China’s leading producers including Hengsheng Group, Jiangsu Haiyang, Fujian Zhongjin, Jinjiang Science & Technology, Wuxi Chang’an and Hengyi Petrochemical have expansion plans in the near term, while Jiangsu Weiming and Tongling Jiahe will step into the PA6 sector. Most of the new/expansion projects will fall into Fujian, Jiangsu and Zhejiang, and the rest will be settled in Anhui and Shandong. Table 2 shows major new/expansion projects in China in the coming few years. According to rough statistics, there will be over 4.1 million t/a of capacity increments, about 900 kt/a of which is expected to be put into production in 2019. By 2025, Chinese PA6 capacity is estimated at 7.7 million t/a. With more capacities to come online, the market competition will be more furious, and accordingly, some less-competitive plants will be driven out of the market and the production concentration will go up. 

   Table 2   China’s new/expansion projects in coming few years

   Chinese PA6 goods have become surplus for exporting following the release of massive capacities. In 2018, the import volumes totaled 390 kt, down by 157 kt from 2014, while the export volumes reached 106 kt, an increase of 43 kt compared with 2014. The import volumes will keep decreasing along with the rising domestic output, but the imports will not be totally replaced and the volumes are expected to stay around 100 kt by 2025. 

Higher self-supply rate

   With an average growth rate of 7.3% in the past five years, Chinese PA6 consumption reached 2.6 million tons in 2018. PA6 is mainly used in the production of fiber (nylon 6), engineering plastics and plastic film in China. Fiber is the key derivative of PA6, accounting for 80% of the total PA6 consumption in 2018; engineering plastics is the second key derivative, taking up 17% of the total; while bi-directional extended nylon-film (BOPA) occupied 2% and other derivatives 1% in the year. 

   Fiber takes the lion’s share in the constitution of Chinese PA6 consumption structure. Nylon is the second largest chemical fiber, only next to polyester. PA6 fiber (nylon 6) has been partly replacing PA66 fiber (nylon 66) in recent years, so the proportion of fiber production in PA6 consumption has increased. Broadly speaking, PA6 and PA66 are mutually replaceable to some extent, but PA6 has partly replaced PA66 in the textile and apparel industry these years for the following reasons. First, capacities of PA6 and its feedstock caprolactam (CPL) have expanded rapidly these years; secondly, PA6 prices are lower than PA66 levels as the latter has risen sharply since 2017 due to feedstock adiponitrile import disruption and resultant price rises; thirdly, PA6 has advantageous property in the fiber textile sector.

   It is expected that Chinese PA6 demand will hit 5.35 million tons by 2025, and the annual growth rate during 2018-2025 will be 6.5%. Fiber will remain the biggest consumer of PA6 by 2025 - albeit at a smaller proportion - and the annual growth rate during 2018-2025 is estimated at 6.3%. Meanwhile, demand from automobile, electrical/electronic and consumer goods sectors will approximately grow at a fast pace of 7.4% during 2018-2025. Demand from the BOPA sector, which is featured with excellent barrier property, puncture resistance and heat resistance and has a wide application in food, medicine and daily chemical packaging, is expected to grow at about 6.1% annually during the same period. 

   Self-supply rate in Chinese PA6 market grew to 92% in 2018, from around 80% in 2014. China will have about 150 kt of surplus goods to export after covering domestic demand in 2025. Operating rates will be maintained at 70% on average in the near future along with capacity ramp-ups. 

Newcomers shall be cautious

   Chinese PA6 market has seen fast growth with the self-supply rate as high as 92% since the 12th five-year plan period and onward. By 2025, China is even expected to turn into a net exporter of PA6 after meeting domestic supply-demand balance. The capacity increase will be mainly from expansion projects of mid and large-sized integration plants.

   Besides, PA6 is mainly used in the production of fiber (nylon) in China now, accounting for 80% of the total consumption, while the rest 20% is used in the production of engineering plastics and other smaller derivatives. It is expected that the driver for domestic PA6 consumption will be on fiber in the short term and on engineering sector in a long run. Accordingly, there are two tips for newcomers to enhance their competitiveness and reduce market risk. First, they should build complexes integrating CPL, PA6 and nylon production; secondly, they should attach importance to the development of PA6 engineering plastics (modified plastic alloy) products and the market scale.