Since July, the domestic polyhexamethylene adipamide (commonly known as nylon 66) market has continued its weak consolidation pattern in the first half of the year and bottomed out again. The current mainstream transaction price is around 18,400 yuan (ton price, the same below). The month-on-month decline exceeded 8%, setting a new low for the year. The profits of enterprises in the nylon industry chain continued to decline, and even suffered losses, which further aroused the industry's attention to the future market of nylon 66.
"Since the market continued to decline last year, the downstream demand for nylon 66 has also continued to shrink. After continuous adjustments in the first half of the year, enterprises such as downstream engineering plastics end products, cord fabrics, and special fibers have basically been in place. The traditional peak season is approaching, and the staged demand is expected to pick up. It is expected that the market outlook of nylon 66 will be mainly repaired and gradually stabilized. At the same time, the adjustment of raw material prices has also appropriately eased the cost pressure of enterprises, which is expected to reduce losses and increase efficiency. In addition, with adiponitrile , Hexamethylenediamine technology has made breakthroughs, the production capacity of nylon 66 will be released one after another, and the dependence of products on foreign products is showing a downward trend. The right to speak in the domestic market may be further improved, helping the market to stabilize and recover.” Analysis by Cui Huajie, head of operation of Henan Ruiyuan New Energy Chemical Co., Ltd. .
Be cautiously optimistic about the recovery of demand
According to the relevant person in charge of Henan Petrochemical Association, the consumption of engineering plastics in nylon 66 series products accounts for about 60%, followed by industrial yarn, which accounts for about 31%. Therefore, whether the demand for engineering plastics and industrial yarns can recover and pick up is the key factor that determines the market trend of nylon 66 in the later stage.
"Currently, the price of nylon 66 (slice) around 18,400 yuan has been a historical low in the past two years, and the operating rate of domestic enterprises is basically at the bottom. As of the end of July, the operating rate is generally 50%~60%. The company may reach a profit-loss balance. Under the current background, most of the industry judges that the market is at the bottom of the stage, and with the arrival of "Golden September and Silver October", the steady growth of demand is a high probability event, so the market transactions are also relatively active, and inquiries begin Increase. As of August 11, some domestic nylon 66 companies have slightly raised their quotations by about 200 yuan.” Zhang Pei, director of the sales company of Pingmei Shenma Engineering Plastics Company, said that the follow-up will pay close attention to changes in raw material prices, track customer orders, and reasonably Arrange sales and production plans to be closely linked, and be cautiously optimistic about the market outlook.
Raw materials fell to reduce losses
According to data from Longzhong Information, the average price of adipic acid in July was 8,803 yuan, a month-on-month decrease of 1.30%, and began to stabilize. In July, the average price of nylon 66 was 19,033 yuan, a month-on-month decrease of 5.70%. The adjustment of raw material market prices has eased the cost pressure of nylon 66 enterprises to a certain extent.
"In the past two years, the production capacity of nylon 66 has grown rapidly, but it still has not reached the scale of one million tons, mainly because the core raw material adiponitrile is highly monopolized, and the demand growth is slow, which restricts the development of China's nylon 66 industry. In half a year, the supply of nylon 66 was oversupply, the market price fell sharply, and the industry lost a lot in the second quarter. After the company adjusted the operating rate of the equipment in the later period, and the raw material hexamethylenediamine market experienced a sharp decline, it offset certain cost pressures. With the positive impact of the accelerated localization process, the profits of nylon 66 companies have been restored to a certain extent. On the whole, the domestic nylon 66 industry is still on the profit and loss line in the first half of the year, and it is hoped that the situation will improve in the second half of the year." Henan Shenma Nylon Chemical Co., Ltd. Zhang Yi, director of sales and service department, said so.
The degree of external dependence continues to decrease
Statistics show that in the first half of 2023, my country's nylon 66 output will be about 292,700 tons, a year-on-year increase of 31.67%. From 2018 to 2023, the import volume of nylon 66 will decrease from 272,900 tons to 198,500 tons, with an average annual decrease of 6.02%, and the foreign dependence will also drop from 52.26% to 36.32%. In the first half of this year, the domestic import of nylon 66 was 95,000 tons, a year-on-year decrease of 13.08%, and the dependence on foreign countries continued to show a downward trend. In contrast, in the first half of 2023, the cumulative export of nylon 66 was 66,900 tons, a year-on-year increase of 9.33%.
"The continuous reduction of the external dependence of nylon 66 is due to the shortage of overseas nylon 66 supply on the one hand, and on the other hand, the continuous release of domestic production capacity in the past two years has led to an increase in supply. However, the terminal demand has not increased significantly, so imports have a certain The degree of reduction. In the context of the increase in imports and exports, domestic enterprises are expected to further increase their voice in the nylon 66 market in the future." A Jiangsu importer and exporter said.
Zhang Yi said that from the perspective of cost, the raw material adiponitrile technology is constantly updated and upgraded, the supply side is expected to increase, and the price still has room to drop, which is also good for nylon 66 manufacturers. However, the right to speak in the adiponitrile/hexamethylenediamine market is still mainly in the hands of foreign companies. Domestic companies need to fully industrialize as soon as possible, especially high-end products. Only in this way can they change from passive to active in the market.
From the perspective of supply and demand, with the arrival of the traditional peak season of "Golden September and Silver October", the demand for nylon 66 may increase slightly. However, it cannot be ignored that in the second half of the year, there is still about 40,000 tons/year of nylon 66 production capacity planned to be put into production in China, and the possibility of market consolidation cannot be ruled out. On the whole, the nylon 66 market is still dominated by repairs. It remains to be seen whether the average market price in the second half of the year will be higher than that in the first half of the year. (Liu Yongming)
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