Chemical Profile - CAPROLACTAM

19 December 2005 00:01  [Source: ICB]

19 December 2005-8 January 2006
EUROPEAN CAPROLACTAM CAPACITY, '000 TONNE/YEAR

Company Location Capacity
Azot Cherkassy Cherkassy, Ukraine 50
BASF Antwerp, Belgium 275
Ludwigshafen, ?Germany 150
Domo Caproleuna Leuna, Germany 100
DSM Geleen, Netherlands 250
Grodno Azot Grodno, Belarus 120
JSC Kuibyshevazot Togliatti, Russia 120
Kemerovo Azot Kemerovo, Russia 125
Lanxess Antwerp, Belgium 160
Shchekinoazot JSC Shchekino, Russia 50
Spolana Neratovice, Czech Republic 48
Ube Chemical Europe Castellon, Spain 95
ZA Pulawy Pulawy, Poland 65
ZA Tarnow Tarnow, Poland 86
SOURCE: TECNON ORBICHEM

Profile last published 8 September 2003; Chemical Profile is published fortnightly.

 
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USES

Caprolactam is primarily used in the production of nylon 6 fibres and resins. Just over 70% of caprolactam is consumed in the production of nylon fibres with the rest used in engineering resins and films.

Nylon 6 fibres are made into textile, carpet and industrial yarns. Nylon resins are used in engineering plastics with applications in the automotive industry, electronics and industrial components, and films for food packaging. Small amounts of capro­lactam are also used in cross-linking for polyurethanes and in the synthesis of lysine.

SUPPLY/DEMAND

Consumption in Europe could be down by 4-5% this year, says Tecnon OrbiChem. This is because of reduced textile nylon fibre output due to the removal of the final textile quota earlier this year. European textile companies are losing business to cheaper imports and are increasingly sourcing products in Asia, as are retailers.

On a global basis, caprolactam demand is expected to be down 1% in 2005. World nylon filament output this year will be down 3-3.5% on 2004 while nylon engineering resins growth, which has slowed in 2005, will be about 3%, estimates Tecnon OrbiChem.

In western Europe, Tecnon OrbiChem estimates production at 915 000 tonne in 2005 compared to 925 000 tonne in 2004, with consumption at 710 000 tonne in 2005 versus 731 000 tonne in 2004. In eastern Europe this year, output has slipped to 630 000 tonne from 642 000 tonne in 2004 while demand edged up by 2000 tonne to 285 000 tonne. Exports from western Europe to China, Taiwan and South Korea have climbed to 165 000 tonne in 2005 from 145 000 tonne last year, while east European volumes have stayed static at 278 000 tonne.

Asian demand, said to be high earlier in the year particularly into the resins sector, has softened a lot in the last few months. New capacities in China are also compensating for closures in Japan in 2004 and 2005.

PRICING

European contract prices for December are starting to settle at around €80-100/tonne lower, on the back of falling benzene feedstock costs which dropped €87/tonne this month. This follows a fall of around €100/tonne for caprolactam in November. The current range is quoted around €1450-1550/tonne. Prices moved from quarterly to monthly agreements in mid-2004, following benzene. Margins are ‘not great’ but have stayed fairly steady this year.

TECHNOLOGY

Most production is based on cyclohexane but can also be made from phenol or toluene. Cyclohexane is oxidised to cyclohexanone, then reacted with hydroxylamine sulphate to give cyclohexanone oxime, followed by a Beckmann rearrangement to yield capro­lactam.

But, large amounts of ammonium sulphate are produced and development work is focused on reducing or even eliminating this byproduct. DSM’s HPO-plus process has cut byproduct from 4.5 tonne/caprolactam tonne to 1.5 tonne.

The first commercial process to completely eliminate ammonium sulphate production is the EniChem/Sumitomo route which Sumitomo has installed at its 65 000 tonne/year plant in Niihama, Japan. BASF, DSM and Rhodia have also developed butadiene-based processes without ammonium sulphate production. DSM says its Altam route gives cost reductions of 25-30%, simplified operations and lower energy use.

HEALTH AND SAFETY

Caprolactam is a white, hygroscopic, crystalline solid with a distinctive odour. It is combustible and reacts violently with strong oxidants. The vapour irritates the eyes, skin and respiratory tract and inhalation may affect the central nervous system and liver.

OUTLOOK

Nylon textile and fibre production will continue to decline steadily in Europe and the US and caprolactam producers will need increased export business to survive, says Tecnon OrbiChem. Players say demand for engineering plastics in western Europe will grow at 3-5%/year. Growth for caprolactam in western Europe is put at 1%/year, and 2-2.5%/year globally.

The major issue for European producers is how fast China builds its own capacity and several projects are being considered. The textile lobby in Europe has succeeded in getting a degree of quota protection back in place to end 2007 (end 2008 for the US) but China is expected to bypass many of these by manufacturing elsewhere, such as in Vietnam and Africa, says Tecnon OrbiChem.





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