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Huge potential for nylon consumption: Experts
02
Dec '16
Huang Wei from Fiber Raw Material Dept of Sinopec Chemical Commercial Holding speaking at the Forum
Huang Wei from Fiber Raw Material Dept of Sinopec Chemical Commercial Holding speaking at the Forum
There is huge potential for increase in nylon consumption said speakers at a two-day seminar held in China. Officials from leading companies, both Chinese and abroad, discussed issues concerning the nylon chain, on December 1 and 2, 2016. Oversupply, demand, capacity, as well as future outlook and strategies were among the points discussed at the forum.

There is huge potential for nylon consumption, and market may begin to shake off the burden of oversupply in 2019, said Huang Wei from Fiber Raw Material Department of Sinopec Chemical Commercial Holding. Wei focused on caprolactam fundamental changes and market perspective and discussed carpolactam market outlook at the 14th China International Polyamide & Intermediates Forum.

The Forum, supported by Nylon Committee of China Chemical Fiber Association (CCFA) and China National Chemical Fiber Corp., was organised by China Chemical & Fiber Economic Information Network (CCFEI) and Tecnon OrbiChem in Shanghai.

Song Manjun, marketing & logistics director of Fujian Shenyuan New Materials discussed China's role in a changing road. In his speech, he pointed out that China is achieving self-sufficiency in caprolactam with improving quality, and gaining strong influence in Asia and globally on pricing and trade flow. He also mentioned that global PA6 growth is mainly from fibre, while China dominates spin PA6 market, with more export of high quality. Though EP and film applications have quality gap, he said, more Chinese players are stepping in.

In his speech about 'Overcapacity Builds Along the Supply Chain of Nylon Industry', Charles Fryer, chairman, Tecnon Orbichem pointed out that massive caprolactam capacity additions in China have created over-capacity and reduced cash margins to zero or negative, and world caprolactam industry was thereby pushed into oversupply. The fall in crude oil prices has helped the competitiveness of polyamide versus polyester and other fibres, but this will reverse if crude oil prices rise. Profitability of caprolactam production is related to the tightness of the supply-demand balance. Growing new capacity means a continuing squeeze on profits. Though caprolactam producers are trying to protect themselves by integrating downstream into PA6 production, more effort is needed, he said.

Jiang Zhenhua, product manager of CCFEI, attributed lower nylon prices, shrinking margin and low operating rates to fast domestic capacity expansion. Though oversupply will continue to weigh on the industry, he believes the industry may improve somewhat in 2017.

Zhao Ling, general manager of CHTC Sinofiber Wuxi talked about 'The Market Status and Development Prospect of Polyamide Staple Fiber Industry in China'. According to him, fibres of differentiated, low-energy consumption, high-quality, functional and environmental-friendly will be the focus in R&D.

James Mills and Emma Liu from Tecnon OrbiChem were of the view that China's adipic acid market has been oversupplied since 2012, and the oversupply will intensify as new adipic acid projects come on-stream. As a result, Chinese adipic acid producers are actively developing overseas markets to absorb excess supply. They made a reference to Invista's recent start-up of new 215 ktpa HMDA and 150 ktpa polymer plants in Shanghai, which will boost demand for polyamide 6,6 polymer in China.

Lin Jun, chief editor of CCFEI, suggested that players should pay attention on relevantly low crude oil values and strong US dollar, risks of RMB appreciation and changing profit structure. She was of the opinion that in 2017, profit of China's nylon industry may probably improve in general, based on inventory cycles in past years. (RKS)

Fibre2Fashion News Desk – China


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