Chemical Profile - NYLON-6 and NYLON-6/6

19 January 2004 00:00  [Source: ICB Americas]

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NYLON-6 and NYLON-6/6    January 19, 2004

US PRODUCER

CAPACITY*

Nylon Resins

BASF, Freeport, Tex. (6)

135

Berkley, Spirit Lake, Iowa (6, 6/6)

5

Custom Resins, Henderson , Ky. (6)

30

DSM Chemicals, Augusta, Ga. (6)

33

DuPont, Chattanooga, Tenn. (6/6)

55

DuPont, Parkersburg, W.Va. (6, 6/6)

350

DuPont, Richmond, Va. (6/6)

110

EMS-Chemie, Sumter, S.C. (6)

11

Honeywell Nylon, Chesterfield, Va. (6)

225

Nyltec North America, Manchester, N.H. (6)

27

Shakespeare Monofilament, Columbia, S.C.
(6, 6/6)

6

Solutia, Pensacola, Fla. (6/6)

210

Ticona, Bishop, Tex. (6/6)

88

Total Nylon Resins

1,285

Nylon Chip and Flake for Fiber

Beaulieu of America, Aiken, S.C. (6)

160

DuPont, Camden, S.C. (6/6)

534

DuPont, Chattanooga, Tenn. (6/6)

261

DuPont, Seaford, Del. (6/6)

424

DuPont, Waynesboro, Va. (6/6)

197

Honeywell Nylon, Anderson, S.C. (6)

172

Honeywell Nylon, Chesterfield, Va. (6)

210

Honeywell Nylon, Clemson, S.C. (6)

160

Honeywell Nylon, Columbia, S.C. (6)

345

Solutia, Greenwood, S.C. (6/6)

189

Solutia, Pensacola, Fla. (6/6)

634

Total Nylon Chip and Flake

3,286

Total Nylon

4,571

*Millions of pounds per year Nylon-6 and Nylon-6/6. Nylon-6 is produced by the reaction of caprolactam with water (producing the intermediate aminocaproic acid), then polymerized by condensation. Nylon-6/6 is produced by reacting adipic acid with hexamethylenediamine. Last year, BASF AG traded its nylon fibers business for Honeywell International's nylon resins business. The two companies also entered into a long-term deal under which BASF will supply Honeywell with nylon chips from its plant in Freeport, Tex., and Honeywell will supply BASF with specialty nylon and nylon copolymers from its plant in Chesterfield, Va. Among other properties exchanged within the deal, Honeywell obtained BASF's fiber production plants at Anderson and Clemson, S.C. Honeywell named its new business unit Honeywell Nylon Inc. In March 2002, Solutia Inc. and Dow Plastics cancelled their nylon resins marketing agreement that was initiated in January 1999. Apparently the anticipated synergies between the Dow product portfolio and Solutia's nylon resins failed to materialize. Under the deal, Solutia produced nylon resins at its Pensacola, Fla., facility and Dow was responsible for compounding and marketing the products. New profile, 1/19/04.

DEMAND
2001: 3,050 million pounds; 2002: 3,145 million pounds; 2006: 3,485 million pounds, projected. Demand equals production plus imports (2001: 195 million pounds; 2002: 235 million pounds) less exports (2001: 550 million pounds; 2002: 655 million pounds).

PRICE
Nylon-6: Historical (1997-2003): High, $1.47 per pound, average annual, inj. mold. grade, bulk, US Gulf; Low, $1.23, same basis. Current: $1.23 to $1.36, same basis. Nylon-6/6: Historical (1997-2003): High, $1.64 per pound, average annual, inj. mold. grade, bulk, US Gulf; Low, $1.38, same basis. Current: $1.38 to $1.46, same basis.

GROWTH
Historical (1997-2002): -3.3 (negative) percent per year; Future: 2.6 percent per year through 2006.

USES
Nylon-6: Textile and industrial fibers, 73 percent; injection molding resins (including automotive/ truck parts, electrical parts, consumer articles), 15 percent; extrusion resins (including film and coatings, non-textile monofilament, tubing and pipe), 12 percent.
Nylon-6/6: Textile and industrial fibers, 76 percent; injection molding resins (including automotive/truck parts, electrical parts, consumer articles), 22 percent; extrusion resins (including film and coatings, non-textile monofilament, tubing and pipe), 2 percent.

STRENGTH
Nylon resins belong to a group of high-performance plastics often referred to as engineering thermoplastics. These materials are noted for their outstanding properties, including high tensile strength; excellent abrasion, chemical and heat resistance; and low coefficient of friction. Thus, they have particular utility in performing mechanical duties that traditionally relied on metal parts. Nylon resin consumption saw a slight decline beginning in 2000 and continuing through 2001, compared with the above GDP growth in previous years. Demand turned around in 2002, and though the data is not in yet for 2003, last year's demand appears to have been quite robust. Automotive is the largest single market for nylon resin compounds, consuming 45 percent of the Nylon-6 and Nylon-6/6 resin material. In recent years, much of this growth has been driven by new under-the-hood applications such as tanks, reservoirs, covers and manifolds. Nylon resin demand growth is forecasted to be 5 percent per year through 2006.

WEAKNESS
After reaching a peak in 1997, domestic consumption of nylon fibers has decreased every year since, recovering slightly in 2002 after the great recessional dip of 2000 to 2001. Nylon fiber demand is linked to the dynamics of the construction industry, available consumer disposable income and the strength of the domestic manufacturing and automotive industries. In recent years, the apparel and industrial sectors were impacted by increased imports of low-cost finished goods while the carpet segment remained essentially constant. However, in 2000 to 2001, carpet demand for nylon fibers declined as the overall economy slowed.

OUTLOOK
The nylon market remains under pressure from high energy and raw material costs as well as the migration of the garment industry to Asia. The one portion of the fiber business that continues to do modestly well is carpets. Industrial carpets softened during the recent recessional period, but have come back since as a moderate growth area. For the forecasted period, fiber applications, which are primarily industrial and consumer carpets, should grow at 1.8 percent annually. Automotive and other resin applications will do substantially better, turning in 5 percent annually. Overall, the composite growth rate for nylon-6 and nylon-6/6 for all application areas is forecasted to be 2.6 percent per annum.





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