Chicago — Global and North American markets for nylon 6/6 resin appear rational. But markets for nylon 6 and PET resins might need to seek counseling.
Nylon 6/6 supplies are adequate in North America, and the material has a stable price outlook, IHS market analyst Paul Blanchard said Oct. 30 at the Global Plastics Summit 2015 in Chicago. New capacity has come online in northeast Asia — primarily China — but global nylon 6/6 operating rates should remain around 80 percent through 2020.
Globally, the 5.3 billion-pound nylon 6/6 market is led by Ascend Performance Materials with a 21 percent share and Invista with a 16 percent share.
The global nylon 6 market, however, is “very fragmented,” Blanchard said, with market leader BASF SE having only an 8 percent share. “The idea of discipline in nylon 6 is off the table,” he said. “It's sort of like the Wild West.”
Large amounts of capacity have been added in China, although Lanxess also has added capacity in Belgium and Honeywell has done the same in the United States. New capacity will lead to lower prices and push global operating rates below 60 percent for the near future, Blanchard said.
Automotive remains the largest end market for both nylon 6 and 6/6 resins.
Oversupply for PET
Over in PET, IHS analyst Tison Keel quoted Einstein's definition of insanity: Doing the same thing over and over and expecting different results.
That's because the global PET field remains awash in excess capacity. North American PET has been oversupplied since 2012, and the Asian PET market had been oversupplied for several years before that, Keel said. The result is a 70 percent global operating rate which he described as “not attractive.”
“The market will continue to be challenged unless it takes shutdowns of PET capacity,” Keel added. “It will have to happen — it's irrational not to take it out.”
Between 650 million and 1 billion pounds of PET capacity could exit North America after 2016, he said. Another 330 million to 550 million pounds of PET resin capacity in the region could be converted to fiber. Demand for the material has dropped with lower carbonated soft drink consumption and from the production of thinner bottles that use less PET.
But at the same time, M&G Group is at work on a new plant in Corpus Christi, Texas, that will have annual production of more than 2 billion pounds of PET. Keel said that plant's output likely will be aimed at battling PET imports coming in from the West Coast. U.S. PET makers currently are asking for government action on PET imported from China, India, Oman and Canada.
As a result, Keel said that U.S. PET prices in 2017 are expected to come down to take share from imports. He advised PET buyers in the region that “there may be some good offers — so keep your options open.”