CHICAGO — Overcapacity might eclipse solid global growth for nylon, polycarbonate and ABS resins for the next five years.
Markets for nylon 6 and 6/6, PC and ABS all are somewhat long on capacity and should be through 2019, according to market experts with the IHS consulting firm. IHS and the Society of the Plastics Industry Inc. co-hosted the 2014 Global Plastics Summit, Oct. 1-2 in Chicago.
“The world is long on nylon 6,” IHS engineering plastics director Paul Blanchard said at the event. “We could be in for a long period of overcapacity.”
Much of that new capacity will be arriving in China in 2014-16, well ahead of global nylon 6 demand. Annual growth rates for the material from 2014-19 will grow to 5.4 percent, according to IHS, up from 3.2 percent in 2009-13.
Blanchard added that although nylon 6 margins currently are low, pricing “will remain high as producers try to recover lost margin.”
The nylon 6/6 picture is somewhat similar, with new capacity arriving in the Middle East from 2015-17. That material has benefited from a resurgent global auto market, but annual growth rates now are expected to decline to 3.4 percent from 2014-19, down from 7.1 percent in 2009-13.
Operating rates for nylon 6/6 “will improve, but will remain competitive,” Blanchard said.
The global PC market also will be flush, with new capacity arriving in Northeast Asia from 2014-20, according to senior principal analyst David Gee. Global demand growth for PC is projected at 3.6 percent from 2014-19, down only slightly from the 3.6 percent rate of 2009-13.
The optical media market once ruled the PC field, but with the collapse of compact discs, it's now tied for third place — along with appliances and housewares — among PC's global end sectors with a 13 percent market share. Electrical/electronic leads the way in PC with a 21 percent share, just ahead of film and sheet at 20 percent.
Global PC prices should be stable through 2015, Gee said, even in an oversupplied market.
ABS supplies also are somewhat long, he added, although the pace of new projects will slow from 2015-19, allowing some capacity to be absorbed. The North American ABS market will be tightened by the closing of a plant operated by Sabic Engineering Plastics in West Virginia.
Global ABS demand per year should rise to 3.6 percent from 2014-19, up from 2.6 percent in 2009-13. North America also is expected to become an even bigger net importer of ABS, with its net total in that area rising from about 330 million pounds in 2014 to almost 570 million pounds in 2019.
In pricing, global ABS prices are expected to be relatively flat through 2015, Gee said.