development and vitality of nylon chaindevelopment and vitality of nylon chain wang songlin hengyi...
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Development and Vitality of Nylon Chain
Wang Songlin
Deputy General Manager
Hengyi Petrochemical Co., Ltd
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10th China International Polyamide & Intermediates Forum
Development and Vitality of Nylon Chain
Wang Songlin
Hengyi Petrochemical Co., Ltd
6 December 2012
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10th China International Polyamide & Intermediates Forum
A long PA6 industrial chain, with CPL as a bottleneck at one time
PA is an abbreviation of Polyamide and a generic term of a polymer with the molecule of its main chain containing reduplicative —[NHCO]—. Here we will mainly talk about PA 6.
PA6 Industrial Chain
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10th China International Polyamide & Intermediates Forum
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10th China International Polyamide & Intermediates Forum
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10th China International Polyamide & Intermediates Forum
CPL - a past profit pooling in PA 6 industrial chain
� CPL price remained high before 2012 as the supply could not satisfy the demand, and producers also made high profits. However, the profits dwindled significantly in 2012, particularly in the second half of the year, producers are basically close to make losses.
� China’s CPL capacity has basically been doubled in 2012, and another 700kt/yr capacity will be brought on stream by the end of 2013. CPL industry will welcome a buyer’s market in 2015 based on the scale of the projects that are under construction or under proposal.
� The newly-added capacity in China has great impact against medium-to-low-end CPL market but little influence on high-end market. And the price spread between high-end and low-end products is enlarging gradually.
Factors pulling down CPL price
� Coal-based benzene is possible to become an ideal solution for
feedstock shortage.
� A breakthrough on thiamine-free rearrangement technology
� Single-line capacity expansion in oximation, rearrangement and refining.
Technology factors
Market factors
� A quick capacity expansion in China intensifies market competition.
� Given unhealthy economic environment, demand for textiles is moderate
in domestic and export markets.
The decline of CPL production cost and market price is good news to the whole nylon chain, and will bring great opportunities to the whole industry in the coming years.
However, it is bad news for new CPL producers and those with plans to build new units.
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10th China International Polyamide & Intermediates Forum
New producers and new capacities of CPL
� Domestic supply/demand fundamental will change after a large number of companies take part in CPL industry, and CPL price will certainly move down.
Company New capacity (kt/yr) Startup time
Shandong Haili 200 Already started up
Baling Hengyi 200 Already started up
Shandong Fangming 100 Already started up
Juhua Group 25 Q1, 2012
Baling Petrochemical 100 Q4, 2012
Juhua Group 100 2013-2014
DSM Nanjing 200 Q2, 2013
Luxi Chemical 200 May 2013 (?)
Shandong Haili (Dafeng) 200 2013
Hubei Sanning Chemical 100 Q2, 2013
Highsun Synthetic Fiber 400 2014-2015
Lanchuang Kehua 200 2014 (?)
Sinopec Fujian & Guangdong 400 2014
Shenma Industry 200 (?)
Total 2,625
CPL capacity expansion quicker than downstream
Capacity in 2012
Benzene
CPL
PA chip
Nylon filament
7970kt
1115kt
2050kt
2220kt
Capacity in 2015
10000kt
3600kt
3000kt
3200kt
52% short Oversupply
With CPL from less tightness to supply length and narrower profit margin, the downstream industry is booming gradually.
Need import
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10th China International Polyamide & Intermediates Forum
Factors to be considered when investing into new CPL projects
• Intellectual property right and technical barrier
• Long processing flow and high HSE risks
• Process depreciation due to technological advancing.
• High logistical pressure due to the needs for a large variety of facilities
and raw & subsidiary materials.
• The lack of skilled technical and management talents.
• The intensified competition due to the capacity expansion leads to a
decline on the expected return on investment.
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10th China International Polyamide & Intermediates Forum
� BOPA film has higher tenacity than BOPE and BOPP film and has lower cost and greater advantage in environmental protection than EVOH and PVDC film, so it is very suitable for frozen food packaging, boiling food packaging and vacuum packaging, without any toxic effect.
� Global demand for BOPA film increases continuously. The annual growth rate in Japan and Europe will amount to 6% in the following 3-5 years, while that in North America will reach 5%. In China, the growth rate is estimated at an astonishing level of 15%.
BOPA with excellent performance & obvious edges will have large potential
Performance comparison for various films
Type Gas barrier Vapor barrier Mechanical Performance
Processability
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10th China International Polyamide & Intermediates Forum
PA6 applications in China, USA and Europe
� With overall nylon market expanding in China, the growth rates of different derivatives and their shares will also change greatly.� Nylon engineering plastics and BOPA film have good prospect and will welcome a significant growth in the future.� BCF, also called carpet yarn, will be the growth point for nylon industry in the future.
End-user demand for PA 6 in China, USA and Europe
Europe
USA
China
Industrial yarn
Textile yarn
Engineering plastics
Carpet yarn
Others
Development trend for polyamide polymerization technology
Single-line large capacity polymerization technology will lead to a further reduction on the production cost of nylon.
By the end of the 10th five-year plan period
By the end of the 11th five-year plan period
By the end of the 12th five-year plan period
Plant capacity 75 tons/day (single line) 160 tons/day 300 tons/day
Construction cycle Two years Two years Two years
Unit investment 9000-10000 yuan/ton 2500-3500 yuan/ton 1800-2500 yuan/ton
Unit running cost 1500-2000 yuan/ton 1000-1300 yuan/ton 700-1000 yuan/ton
Comprehensive energy consumption 230kgce/t 180kgce/t 150 kgce/t
Machinery localization rate 10% 60% 80%
Process features and technical level
Low capacity, mainly makes conventional
products
Large capacity, atmospheric pressure, conti. polymerization,
continuous extraction & drying, autonomous
production
Large capacity, atmospheric pressure, conti. polymerization,
continuous extraction & drying, autonomous
production.
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Foreign trade situation not optimistic
The first negative import growth in China since October 2009 appeared in August 2012. of course, the situation in January 2012 is not taken into consideration due to the Spring Festival holiday.
From January to October 2012, the accumulated exports of textiles and garments from China amount to $209.86 billion, growing by 2%. Of them, the export value of textiles is $79.1 billion and that of garments is $130.76 billion, rising by 1% and 2.6% respectively.
Export growth Import growth
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10th China International Polyamide & Intermediates Forum
An outlook on PA 6 chain
� In the coming three years, China’s CPL industry will welcome a high-speed development. The capacity will expand significantly, while the import dependence rate will reduce greatly. CPL supply will completely go beyond the demand in 2015.
� After the entry into 2014, the downstream in PA 6 chain will welcome a golden development time, in line with a significant drop on CPL price and the advance of technology, and another profit pooling for the chain will form up.
� Currently, the nylon textile filament yarn occupies a too largeproportion in all downstream derivatives in the PA chain. In the future, the consumption of engineering plastics, nylon industrial yarn and film will increase a lot, and their shares will enlarge.
地址:浙江省杭州市萧山区 邮编:311215电话:0571-82795888 传真:0571-83872016邮箱:[email protected] 网址: www.hengyi.com
HENGYI PETROCHEMICAL CO.,LTD. ZIP Code: 311215ADD: Xiaoshan,Hangzhou,Zhejiang,ChinaTEL: 86-571-82795888 FAX: 86-571-83872016E-mail: [email protected] Web Site: www.hengyi.com
Thank you!!!!
We look forward to make cooperative development with all players in nylon industrial chain.