Nylon 66: Farewell to the era of high profits, the market has downward pressure

Since the beginning of this year, the price of nylon 66 chips has fallen all the way, and the market price fell below 18,000 in August, thus causing domestic traders and downstream customers to enter the market to bottom, a wave of rebound to 25,500-26,000 yuan / ton, after entering October, the market price once again entered the weak market, the market is still facing downward pressure, mainly in the following aspects
.

Supply is increasing, demand is sluggish

This year, the production capacity of raw materials adiponitrile, hexanediamine, or nylon 66 chips has increased
.
In addition to Huafeng's 100,000 tons of new production capacity put into operation, China Chemical's 300,000 tons/year adiponitrile plant has been delayed, the specific time is to be determined, INVISTA Shanghai 400,000 tons/year plant is currently announced to be produced in November, of course, there is still uncertainty, Ningxia Ruitai 20,000 tons/year hexanediamine plant put into operation in the first half of this year, regardless of whether these devices are normal or full production, the increase in supply brought about by capacity increase is a fact
.
In terms of nylon 66 chips, Ruitai added 40,000 tons, Huafeng's 100,000 tons, and Jushun 05,000 tons, increasing supply
.

From the perspective of import and export, the import volume of adiponitrile increased significantly compared with the same period last year, with an increase of about 34,000 tons, and the import of hexamethylenediamine decreased by about 22,000 tons, so the supply of raw materials increased
slightly compared with last year.
From the perspective of the import and export of nylon 66 chips, imports fell by 43,000 tons, exports fell by about 3,000 tons, and the net import of nylon 66 chips fell by about
40,000 tons.

From the perspective of demand, the overall demand for plastics market this year is average, the market does not see any bright spots, whether it is automobiles or home appliances, in the textile field, the demand is also general
.

The spread with nylon 6 chips is still large, and the spread may shrink in the future

At present, the price difference between nylon 66 and nylon 6 is more than 10,000 yuan / ton, according to the mean reversion theory, with the solution of the raw material bottleneck, the price difference returns to 5,000 yuan / ton is a normal phenomenon, in the future with the expansion of the scale of nylon 66, nylon 66 is no longer a shortage of products, the price difference is lower
.

Production capacity continues to expand, and the golden cycle of profits has passed

From the announced statistics of new adiponitrile and nylon 66 chips, the future domestic adiponitrile production capacity will exceed 4 million tons (assuming that these projects can be put into production), nylon 66 production capacity will exceed 7 million tons, and with the expansion of production capacity, from the perspective of a product cycle, the golden cycle of profits has passed, and the future must enter the state of Boli or even losses, of course, if the product can develop new uses
.

Overall, in the current environment, although nylon 66 has entered the boli state, but the market is still under pressure, the future market may be a certain set of equipment not put into production as scheduled or accidents and other factors brought about by the short-term market, nylon 66 high profit era will never return
.