25 March 2002 00:00 [Source: ICB]A slump in nylon fibre demand hit markets last year. Future strong demand growth will be driven by China's polyurethane sector
The largest use of adipic acid is to make nylon 6,6 which accounts for 73% of global output, says consultancy Tecnon OrbiChem. Nylon fibre accounts for 47% of the global market and nylon resin for 26%. The non-nylon sector accounts for 27% of world consumption of which polyurethanes is the biggest end-use. Other smaller uses are plasticisers, resins, coatings and polyamide 4,6. Adipic acid is also used to produce wet strength resins for paper chemicals and synthetic lubricants and greases.
Europe accounts for about 35% of world consumption which stands at about 2.3m tonne/year, notes Tecnon OrbiChem. The consultancy rates global capacity at about 2.8m tonne/year and European capacity at around 1.1m tonne/year. European production is estimated by Tecnon OrbiChem to increase to 900 000 tonne in 2002, from about 850 000 tonne in 2001.
European net exports declined to 70 000-80 000 tonne in 2001 because of the economic slowdown and increased production in Asia. Demand into the nylon sector was down 8-10% worldwide last year, with the decline in Europe escalating in the last quarter. Non-nylon markets, particularly polyurethanes, fared better, although a strong first half gave way to a poor second half and kept demand growth in Europe flat.
Utilisation rates in Europe were 70-80% in 2001 as output was reduced to match demand. Fibrex closed its plant 'indefinitely' last July. Operating rates have now recovered slightly to an average of 85% as the market begins to show signs of firming. Consumers' inventories are low following year-end destocking.
Producers report a pick up in sales, but this could be partly driven by consumers pre-buying ahead of a price increase. Radici's new plant in Zeitz, Germany, is finally starting up, delayed from March 2001, but sources say product has not yet appeared on the market.
|Asahi Kasei||Nobeoka, Japan||120|
|China Shen Ma|
|Ping Ding Shang, China||45|
|Orange, Texas, US||181|
|Pulau Sakra, Singapore||110|
|Victoria, Texas, US||349|
|Hopewell, Virginia, US||17|
|Onsan, South Korea||70|
|Solutia||Pensacola, Florida, US||400|
|Taiyaun Chemical Industrial|
*adipic synthesis expanded to 270 000 tonne/year end 2001
** currently closed until further noticeSource: Tecnon OrbiChem/ECN
European producers will be seeking a E150/tonne increase in second quarter contracts to reflect the recent steep rise in benzene feedstock costs. Quarter one contracts are reported in the range E1080-1200/ tonne.
Most adipic acid is manufactured by liquid phase nitric acid oxidation of a cyclohexanol-cyclohexanone mixture, also called ketone-alcohol (KA) oil. KA oil can be derived from benzene, cyclohexane or phenol. Tecnon OrbiChem says 86.5% of adipic acid is from cyclohexane, 9% from phenol and 4.5% from cyclohexene. Another route is based on butadiene using carboalkoxylation and this is used in Rhodia's plant at Chalampé, France. A one step oxidation route which eliminates the use of nitric acid has been developed but not commercialised.
Adipic acid is a white, crystalline, odourless powder. It is combustible and finely dispersed particles form explosive mixtures in air. Adipic acid decomposes on heating producing volatile acidic vapours. It irritates the eyes, skin and respiratory tract and inhalation may cause asthmatic reactions.
Players are expecting markets to recover in 2002. Tecnon OrbiChem forecasts global growth at 4-4.5%/year. Non-nylonapplications show the strongest growth at 7%/year, in particular polyurethanes which are expected to grow at 9-10%/year. Engineering resins will show annual growth of 6% and fibres' growth is predicted at 2-2.5%/year.
Asia remains the fastest growing region, especially China where Tecnon OrbiChem expects consumption to triple from 40 000 tonne in 1999 to 120 000 tonne this year, although this will be at the expense of other Asian countries as there has been a shift in polyurethane manufacturing in recent years from South Korea and Taiwan to China.
Investment is mainly targeted in Asia where there is undercapacity. Rhodia's 65 000 tonne/year expansion at Onsan, South Korea, is due in 2003. Rhodia has a long-term deal with Asahi Kasei which will take 50 000 tonne/year of the plant's output.
Liaoyang Petrochemical plans a 70 000 tonne/year increase in 2004 and China Shen Ma is also expected to raise production. DuPont had previously announced plans to add 150 000 tonne/year across its North American plants by 2003, but it is unclear whether this expansion will proceed in the short term.
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