Nylon 66: Repairing is the main method to stabilize and be expected
2023/8/24
Since last year's continuous decline in the market, downstream demand for nylon 66 has also continued to shrink. Downstream engineering plastic terminal products, curtain fabrics, special fibers, and other enterprises have been basically in place after continuous adjustments in the first half of the year. With the arrival of the traditional peak season of 'golden nine silver ten', phased demand is expected to rebound. It is expected that nylon 66 will be mainly repaired in the future market and gradually stabilize. At the same time, the adjustment of raw material prices has also appropriately alleviated the cost pressure on enterprises It is expected to reduce losses and increase efficiency. In addition, with breakthroughs in adiponitrile and hexamethylene diamine technologies, the production capacity of nylon 66 will gradually be released, and the product's external dependence will be decreasing. The discourse power in the domestic market may be further enhanced, helping the market stabilize and recover Cui Huajie, the person in charge of the operation of Henan Ruiyuan New Energy Chemical, analyzed and said.
Be cautious and optimistic about the recovery of demand
According to the relevant person in charge of Henan Petrochemical Association, the consumption proportion of engineering plastics in nylon 66 series products is about 60%, followed by industrial silk, with a consumption proportion of about 31%. Therefore, whether the demand for engineering plastics and industrial silk can recover and recover is a key factor determining the future market trend of nylon 66.
Currently, nylon 66 (sliced) The price of around 18400 yuan is already at a historical low in nearly 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 between 50% and 60%, and it is expected that enterprises may reach a breakeven point by the end of August. In the current context, most of the industry judges that the market is at the bottom of the stage, and with the arrival of the 'Golden Nine Silver Ten', stable demand growth is a high probability event. Therefore, market trading is also relatively active, and inquiries are starting to increase. As of August 11th, some domestic nylon 66 companies have slightly increased their prices by around 200 yuan Zhang Pei, Director of Sales Company at Pingmei Shenma Engineering Plastics Company, stated that he will closely monitor changes in raw material prices, track customer orders, arrange sales and production plans in a reasonable manner, and be cautious and optimistic about the future market.
Reduction of losses for enterprises due to decline in raw materials
According to data from Longzhong Information, the average price of adipic acid in July was 8803 yuan, a decrease of 1.30% month on month, and it has begun to stabilize; In the same month, Invida's executed quotation for hexamethylene diamine was 20500 yuan, a decrease of 4.65% compared to the previous month. The average price of nylon 66 in July was 190.33 million yuan, a decrease of 5.70% compared to the previous month. The adjustment of raw material market prices has to some extent alleviated the cost pressure of nylon 66 enterprises.
In the past two years, the production capacity of nylon 66 has grown rapidly, but it has not yet reached a scale of one million tons. This is mainly due to the high monopoly of the core raw material adiponitrile, coupled with slow demand growth, which has constrained the development of China's nylon 66 industry. In the first half of the year, nylon 66 was oversupplied, and market prices significantly declined. In the second quarter, the industry suffered significant losses. Later, after the enterprise adjusted the operating rate of the device, and the raw material adiponitrile market experienced a significant decline, offsetting it Due to certain cost pressures and the positive impact of the accelerated localization process of adiponitrile, the profits of nylon 66 enterprises have been restored to a certain extent. Overall, in the first half of the year, the domestic nylon 66 industry remained at a profit and loss level, and we hope that the situation will improve in the second half Zhang Yi, Minister of Sales Service Department of Henan Shenma Nylon Chemical Co., Ltd.
Continuous decrease in external dependence
Statistical data shows that in the first half of 2023, China's nylon 66 production was approximately 292700 tons, an increase of 31.67% year-on-year. The average annual comprehensive operating rate of the unit in the first half of the year was approximately 69.83%. From 2018 to 2022, the import volume of nylon 66 decreased from 272900 tons to 198500 tons, with an average annual decrease of 6.02%. The degree of external dependence also decreased from 52.26% to 36.32%. In the first half of this year, the domestic import of nylon 66 reached 95000 tons, a year-on-year decrease of 13.08%, and the degree of external dependence continued to show a downward trend. In contrast, in the first half of 2023, the cumulative export of nylon 66 reached 66900 tons, a year-on-year increase of 9.33%.
The continuous decrease in the external dependence of nylon 66 is partly due to a shortage of overseas nylon 66 supply, and partly due to the continuous release of domestic production capacity in the past two years, which has led to an increase in supply. However, there has not been a significant increase in terminal demand, so imports have decreased to a certain extent. Against the background of import reduction and export increase, domestic enterprises are expected to further enhance their voice in the nylon 66 market in the future, "said a Jiangsu importer and exporter.
From the perspective of supply and demand, with the arrival of the traditional peak season of "Golden Nine Silver Ten", there may be a slight increase in demand for nylon 66. However, it cannot be ignored that there is still a planned production capacity of 40000 tons/year of nylon 66 in China in the second half of the year, which does not rule out the possibility of market consolidation. Overall, the nylon 66 market is still mainly focused on repair, and it remains to be seen whether the average market price in the second half of the year can surpass that in the first half.
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