Foreign Adiponitrile Production Capacity Shrinks, While Domestic Nylon 66 Speeds Up

Nylon is an important polymer material. The global production scale is close to 10 million tons, and the market space is hundreds of billions. Among them, PA 6 and PA 66 together account for nearly 90%, which belong to conventional nylon. Besides, there is also special nylon, which mainly includes long-chain nylon and high-temperature nylon. Long-chain nylon occupies a dominant position, mainly including PA12, PA11, PA610, PA612, PA410, PA1010, and PA1012.

At present, caprolactam, the main raw material of nylon 6, has achieved domestic production, and the domestic self-sufficiency rate of nylon 6 has exceeded 90%. However, the import dependence of PA 66 in China is almost 100%, and the development of the industry is limited. The PA 66 industry presents an oligopoly pattern in the world, in which the global production technology and production scale are mainly concentrated in the developed countries and regions such as the United States, Britain, France, Italy, Germany, and Japan. The main manufacturers include INVISTA, DuPont, and BASF. The top five companies account for more than 80% of the global market share, which can control the PA 66 industry chain by controlling adiponitrile. The advanced production technology of adiponitrile, one of the main raw materials, is currently controlled by companies such as INVISTA and Rhodia. In particular, INVISTA almost monopolizes the global adiponitrile trade, and its output accounts for about 40% of the global PA 66 polymer production capacity.

The Price Has Risen By 75% in Half A Year and Will Continue for Half A Year

INVISTA has reduced the global supply of adiponitrile. The original annual production capacity was 600,000 tons, but the current annual output cannot reach 400,000 tons, which will take 3 months to restart after a follow-up overhaul, so the tight supply will last for at least half a year. At present, the PA 66 factories control the shipment volume. The previous monthly supply of 300 tons is now reduced to 200 tons, which is 70%-80% of the previous normal level. At present, technical reforms in European factories are encountering bottlenecks, and the supply of adiponitrile is tight.

The recovery of demand for downstream automobiles and home appliances has jointly boosted the continuous price increase of PA66 products. In October, China's automobile production and sales completed 2.552 million and 2.573 million respectively, an increase of 11.0% and 12.5% respectively year-on-year. The production and sales situation of the automobile market continued to improve. In the home appliance market, data shows that in the third quarter of 2020, the home appliance market has a sales scale of 166.21 billion yuan, a year-on-year decrease of 4.8% in retail sales. Among them, the scale of online channel sales was 68.9 billion yuan, a year-on-year increase of 10.6%, and online home appliance sales accounted for 41.5%, an increase of 5.8 percentage points from the same period last year. As the epidemic prevention and control situation stabilizes and improves, the offline consumer market is gradually picking up and the sales of major categories of home appliances further rebounded in the third quarter. The recovery of downstream demand and the shrinking supply have caused the price of PA66 to rise sharply. Therefore, the price of PA66 chips has risen from 18,000 yuan per ton in July to the current 29,000 yuan per ton, an increase of 61.1%.

Domestic Adiponitrile Speeds Up, Good for Nylon 66 Industry

The production barrier of adiponitrile is high, and there is no industrialized production device for dinitrile in my country, which makes the import volume of adiponitrile in China remain high all year round. Domestic manufacturers have gone through thousands of attempts and failures in order to break through the technical bottleneck. Finally, the dawn has arrived. In 2015, the domestic adiponitrile pilot test technology passed the identification of scientific and technological achievements. In July last year, China Chemical built the first set of 200,000-ton grade adiponitrile industrial equipment in China, marking the acceleration of domestic adiponitrile industrialization. As the first adiponitrile project in China, Tianchen Qixiang's adiponitrile project will break the monopoly of INVISTA and other multinational companies in the upstream raw materials of nylon 66 after it is put into operation, and compete for the pricing power of upstream raw materials, thus giving rise to my country's nylon 66 industry. 

The global PA 66 industry has a strong monopoly, and there is no domestic industrialized production facility for adiponitrile, which makes China a net importer of adiponitrile, hexamethylene diamine, and PA 66 globally. The defects in the production of adiponitrile have severely restricted the development of China's PA 66 industry and have become the core bottleneck problem for the development of the bi-monomer polyamide industry. Looking for products that can replace PA 66 or adiponitrile has become another way to develop.

Domestic Nylon 56 Is Expected to Replace Nylon 66, Opening Another Blue Ocean

Nylon 56 has better performance than nylon 66. Nylon 56 is similar to PA 66 in features of abrasion resistance, lightweight, strength, and density. Compared with hexamethylene diamine, the raw material of nylon 56 bio-based pentane diamine has one carbonless, which disrupts the perfect hydrogen bond sorting of PA 66. The newly added hydroxyl and amino groups can also enhance the water absorption of nylon 56, and improve dyeability, softness, and viscosity without reducing abrasion resistance.

Nylon 56 is more environmentally friendly than PA 66. nylon 56 is polymerized from bio-based pentane diamine and adipic acid. Compared with hexamethylene diamine to produce PA 66, products using bio-based pentane diamine to produce nylon 56 can reduce CO2 emissions by 27%. And the main energy source of bio-based pentane diamine comes from renewable resources.

Driven by the concept of natural and green biomaterials, and cost advantages, PA 56 has started the process of replacing PA 66 and PA 6 in the field of clothing fibers and carpet fibers. Cathay uses bio-manufacturing methods to produce bio-based polyamides, in which some capacity projects have been pilot tested.

At present, since the downstream demand is recovering and the production capacity of the international leader adiponitrile is shrinking, the price of nylon 66 remains high. Domestically, the adiponitrile speeds up, and the domestic nylon 66 industry will soon break through international restrictions. Besides, nylon 56 is recognized by the outside world, which is expected to improve the restrictive pattern of the nylon 66 industry and open another huge market.

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