Erin, CEO of AdvanSix, a comprehensive American nylon 6 producer Kane said recently that AdvanSix is concerned about the fair trade issue of nylon 6 and may file legal proceedings against China's exports to the United States.
Erin Kane said in the company's second-quarter earnings call that the slowdown in China's economic growth has prompted Chinese producers to shift products to other regions, putting pressure on nylon 6 pricing.
She said AdvanSix's engineering plastics business was facing "serious challenges" as a result of China's export volumes reaching an all-time high.
In addition, the market for nylon 6 engineering plastics has also been affected, she claims: "bringing pressure and competition to our customers."
China’s exports are roughly three times the capacity of AdvanSix’s nylon 6 plant in Chesterfield, Va., she noted. Chesterfield has a capacity of 440 million pounds per year, according to the company's website.
On a potential trade case, she said: "We want to keep all options open."
She added: "While we continue to monitor developments in the industry, it is important to us to ensure fair trade practices, which we are reviewing."
AdvanSix is also monitoring China's exports of nylon precursor products, caprolactam and ammonium sulfate, she said.
AdvanSix's second quarter results were impacted by unfavorable market pricing and narrowing feedstock spreads for nylon as well as caprolactam and ammonium sulfate.
The company produces caprolactam, which is used to make nylon 6 resin. The company promotes and sells caprolactam that cannot be consumed internally.
Ammonium sulfate is a by-product of the caprolactam production process.
Caprolactam and ammonium sulfate are both important products for AdvanSix, accounting for 18% and 32%, respectively, of the company's $428 million in second-quarter sales.
Asked if the U.S. was in an industrial recession, Erin Kane said there were signs that might be the case.
She noted that U.S. manufacturing shrank for the ninth straight month in July, noting that the chemical industry is experiencing continued destocking and lower operating rates.
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