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Polyamide 66 market overview
!!Crystal Chiang, Director of PCI Wood Mackenzie in Asia

2019-09-11 11:49:36
Crystal Chiang, Director of PCI Wood Mackenzie in Asia, delivers her report of Polyamide 66 market overview 

Crystal's report first briefly introduced industrial chain process (two routes) and production process of polyamide 66, and then introduced it in detail from four aspects. 

Firstly, PA66 demand by region. In early stage, over 50% of the demand was concentrated in North America and Europe, and the proportion of China and other region of Asia gradually increased in the later stage. (PA66 demand in China will account for 30% by 2022). Europe and the United States were in oversupply, so export and price control were the main factors, while China expanded capacity amid tight supply. End-use of nylon 6 and nylon 66 was basically similar, but demand of the latter was only half of the former, so there was a coordination between price and demand. However, according to actual situation, downstream mills needed five years to test, and automobile manufacturers did not pay the bill. The largest demand for nylon 66 was engineering plastics, while nearly half of downstream products were used in automotive industry. For nylon 66, automobile industry had a great impact, while the impact was not very serious for nylon 6. By 2025, China demand for nylon 66 will be comparable to that of the United States. 

Secondly, global supply and demand of adipic acid was in excess. Regionally speaking, supply and demand in European and American markets were relatively balanced, but China market was obviously oversupply, so the China market needed to export, while the European and American markets will import under consideration of price and stable supply. Price of AA was the highest in Europe and the lowest in Asia. But European buyers preferred to buy contracts. There was a relatively low cash cost of AA in China in Jul 2019, and many manufacturers in China had similar costs who purchased same technology. Compared with that in Jul 2018, the lowest cost was in North America. Europe and America are the main suppliers of HMDA. 

Thirdly, adiponitrile supply and demand by region. Adiponitrile supply was mainly in Europe and the United States. Globally, the supply exceeds demand by nearly 30%, but operating rate will not exceed 90%. (In 2010-2019, the adiponitrile plant has occurred force majeure.) As a result, the supply of chip was insufficient and nylon 66 was in short supply. (Invida, for example, will put into operation in 2023, do wil other factories.) In 2018-2024, 60% production capacity will put into operation. From trade surplus of nylon 66 industry chain in mainland China, only AA has the advantage, and others depend on imports. 

Fourthly, conclusion. PA66 growth rates are dominated by engineering plastic. PA66 was invented in the USA and the Americas are still the biggest market for PA66. The Americas and Europe are net exporters of PA66. China and the Rest-of-Asia are net importers. Adipic acid capacity is much more than demand in China and many Chinese producers are suffering low production rates. Many Chinese adipic acid producers are losing money. China has become a net exporter of adipic acid, but remains a net importer of all other PA66-related products. The Cost Curve for Adipic Acid is relatively flat, because most producers use the same raw materials and same technologies. This makes rationalisation more difficult. It looks like China is finally going to get an ADN plant, and possibly two. This is long overdue as China will shortly match the USA in terms of PA66 demand. The question is what happens to the existing ADN plants when new Chinese capacity comes on line. 
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