Auto market pushes PC, nylon resins

Polycarbonate, nylon 6 and nylon 6/6 resins all are benefiting from growth in the North American automotive market.

“There's still a need for weight reduction, so the average amount of polycarbonate used per vehicle is increasing,” said Sam Stewart, sales and distribution vice president with Pittsburgh-based Covestro LLC, the North American arm of global PC giant Covestro AG of Leverkeusen, Germany.

PC use is rising in automotive interior trim, instrument panels and forward lighting systems, he added. Another PC end market set to grow in 2016, according to Stewart, is sheet, where PC increasingly is being used in residential construction, commercial restaurants, decorative skylighting and security applications in public buildings. The information technology market also is using more carbon fiber-filled PC in laptop housings.

Global PC demand growth is expected to be 4.5 to 5 percent in 2016, with North American demand growth for the materials slightly lower at 3.5 to 4 percent, said Stewart.

“The growth rate [for 2016] will be highest in Asia, but North American growth still will be above GDP,” he added. “We're really optimistic for next year. The global supply/demand balance is good, and we should see even more balanced global capacity in 2017.”

Covestro's PC customers also could benefit from the company's recent spinoff from longtime parent Bayer AG. “The technology and people came with the spinoff, and that's the backbone of our company,” Stewart said. “We'll have more opportunity for capital investment, and we're excited for the opportunity to compete.”

Like PC, nylon 6 and 6/6 are selling more material into a North American auto field where builds of cars and light trucks surpassed the 17 million mark in 2015. That production number roughly has doubled from the 8.6 million level it slumped to in 2009, during the worst of the global recession. Regional builds are expected to be in the 17 million to 18 million range through 2020.

“Automotive continues as our major end use market,” said Richard Mayo, global nylon business director at leading nylon 6/6 supplier DuPont Co. of Wilmington, Del. “What's happening there is really important as far as driving demand for product.”

Mayo cited auto cam covers, which “still have way to go before being fully penetrated” by nylon 6/6. Even more mature auto applications can be drivers for growth, he explained.

“Some applications can take years or decades to make full use of a material,” Mayo added. “The exciting thing is that the penetration rate in pounds per vehicle has a multiplier effect. That creates a bigger opportunity.”

Outside of North America, DuPont is seeing nylon 6/6 demand growth in consumer electronic items such as smartphones and tablets. On the capacity front, DuPont earlier this year increased capacity for high-temperature nylon by 10 percent at its plant in Richmond, Va., and boosted nylon 6/6 capacity by 20 percent at its plant in Uentrop, Germany.

“We're always looking at how to expand our product lines to help them compete,” Mayo said. “Our Zytel Plus high-heat get resins are getting traction in new applications for metal substitution. They can offer lower weight and lower cost and really push boundaries.”

At the recent Global Plastics Summit 2015 in Chicago, IHS Chemical analyst Paul Blanchard said that nylon 6/6 supplies are adequate in North America, and the material has a stable price outlook. 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 nylon 6 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.