By Xia Shiqing and Hu Shiming, CNCIC Consulting Department
PA66 is short for polyamide 66 (commonly known as nylon 66), widely applied in engineering plastics, civil-use filament and film, etc. In addition to being vital for vehicle lightweight, it is ideal for high-end yoga clothing, quick drying, elastic nylon coats and jackets.
China’s PA 66 industry status
In 2021, China’s PA 66, with the capacity and output of around 670 000 t/a and 390 000 tons respectively, had an operation rate of 58% (See Figure 1), which was hampered by the import of expensive but crucial material of hexanediamine and adiponitrile.
At present, China has 7 nylon enterprises, of which the first three, Invista Group, Shenma Industrial Co., Ltd., and Huafon Group Co., Ltd., have a combined capacity of 550 000 t/a, accounting for 82% of the country’s capacity (See Table 1). In 2021, the above three enterprises ran at full capacity, but Xingjia Chemical Co., Ltd., Jiangsu Huayang Nylon Co., Ltd., and Youxian Technology (Dandong) Co., Ltd. did not.
Figure 1 China’s PA 66 supply from 2016 to 2022
Be cautious about overcapacity of domestic ongoing and planning PA 66 projects in the future
In 2022, China’s enterprises actively worked on PA 66 projects. By now, the capacity of China’s PA 66 ongoing and planning projects have been over 5 000 000 t/a. Due to the uncertainties of some projects’ implementation, the new capacity is expected to increase by 2 000 000 t/a between 2022 and 2025, reaching 2 600 000 t/a in 2025. China’s ongoing and planning PA 66 projects are shown in Table 2.
A bright outlook for downstream market thanks to Multiple outstanding performances
China’s PA 66 consumption increased from 2016 to 2021, reaching 516 000 tons in 2021 with self-sufficiency of 75.6%. Seen from Figure 2, China’s PA 66 became more self-sufficient by years.
Figure 2 China’s PA 66 consumption from 2016 to 2022
PA 66 can be classified into engineering plastics, fibre and thin films based on consumer demand. In 2021, China’s engineering plastics accounted for 58% of PA 66 consumption, followed by industrial fibre (28%). And textile fibre ranked the third (10%) (See Figure 3). From 2016 to 2021, PA 66 consumption of engineering plastics grew at the fastest pace, with a compound annual growth rate (CAGR) of 8.8%.
Figure 3 China’s PA 66 consumption structure
Judging from terminal consumption market, PA 66 is mainly applied in vehicle, electrical and electronic products, and rail transit, respectively accounting for 47%, 28% and 25% (See Figure 4).
Figure 4 In 2021 China’s PA 66 consumption structure in engineering
PA 66 is an kind of important vehicle lightweight material, lowering the vehicle weight by 30% while significantly increasing safety. Meanwhile, PA 66 is widely used in rail transit, electrical and electronic areas. For civil use, PA 66 is ideally used for yoga clothes, jackets, high-end clothes and mid-high-end appliances, hard to find alternatives. Additionally, domestic technology breakthroughs and mass production reduce the cost of PA 66, and non-civil use filament will progressively replace PA 66.
From 2017 to 2022, domestic PA 66’s market price fluctuated from RMB10 000-21 000/ton, while its product price varied from RMB18 000-44 000/ton, surging first and then falling, affected by adiponitrile and hexanediamine’s price fluctuation (See Figure 5). In the future, with increasing domestic manufacturing, adiponitrile and PA 66’s prices will furthermore decrease to replace PA 6, which is a main driver for PA 66 consumption. And between 2022 and 2025, domestic PA 66 price is expected to range from RMB15 000-25 000/ton, falling on the whole.
Figure 5 The price trend of China’s PA 66 and PA 6
In 2021, domestic demand for PA 66 was 516 000 tons while for PA 6 was 4 069 000 tons. In the next 5 years, it is assumed that PA 66 price will drop to a level equal to PA 6. But PA 6 will keep the way it is and not be replaced by PA 66 in the field of civil-use filament. Additionally, PA 6 consumption will occupy 40% in non-civil use filament field, and by contrast, PA 66 popularity will be 50%. Calculate based on the above, China’s PA 66 demand will be 1 330 000 tons in 2025.
The primary element affecting the demand release of PA 66 in the future will be the cost. Thanks to domestic technology breakthroughs and industry guidance, local production of adipodinitrile, a substitute for PA 66, will upgrade supply-side in the next years. And as vehicle lightweight proceeds, the engineering plastics applied for vehicles will be the major fuel of PA 66 slices.
