Chemical profile: Caprolactam

Caprolactam

12 May 2008 00:00  [Source: ICB]

USES

Caprolactam (capro) is mainly used to produce nylon 6 fibers and engineering plastics. Around 68% of global demand is in nylon fiber and filament, with 32% in engineering resins and films.

Nylon 6 fibers are extensively used in textiles, carpets and industrial yarns, with tire-cord being a large and growing market. Nylon resins are the basis of engineering plastics, used in electronic/electrical components, cars, and oriented polyamide films for food packaging. Smaller quantities are used to make lysine, and as cross-linking agents for polyurethanes.

SUPPLY/DEMAND

Consultancy Tecnon OrbiChem estimates that global demand in 2008 may be 3% up on 2007. In Europe, consumption is unlikely to change as nylon textile fiber production is continuing to fall at about the same rate as engineering resin demand is growing.

European textile fiber producers have steadily lost market share to lower-cost Asian competitors and clothing designers, who are increasingly sourcing products in China, Taiwan and, more recently, Indonesia and Vietnam, where labor costs are far lower.

Tecnon OrbiChem puts West European demand and production during 2007 at 929,000 tonnes and 1.16m tonnes, respectively compared with 905,000 tonnes and 1.14m tonnes during 2006. East European output rose slightly, to 462,000 tonnes in 2007, from 454,000 tonnes in 2006, while demand lifted to 177,000 tonnes from 165,000 tonnes.

West European exports to China, Taiwan and South Korea dipped last year to 131,000 tonnes/year from 141,000 tonnes/year, while East European volumes were static at 315,000 tonnes/year in 2006 and 2007.

New capacity in China, Korea and Taiwan in the last two years has more than compensated for capacity lost by plant closures in Japan in 2004 and 2005.

PRICES

European contracts in April fell by €30/tonne, after rising €40/tonne in March. The current range is put at €1,934-1,975/tonne free delivered Northwest Europe (FD NWE). Contract negotiations have yet to begin for May, but indications from producers suggest they will be pushing for the full €19/tonne increase in benzene feedstock costs. Surging crude and energy costs, with the subsequent push on prices, remain a major concern.

TECHNOLOGY

Most capro is produced from cyclohexane (CX), but it can also be made from phenol or toluene. CX is oxidized to cyclohexanone, then reacted with hydroxylamine sulphate to cyclohexanone oxime, followed by a Beckman rearrangement to yield capro.

But, this route coproduces large volumes of ammonium sulfate (AS) and work has focused on reducing or eliminating its production. Conventional processes produce up to 4.5 tonnes AS/tonne of capro, and recent technologies have reduced this to 1.5 tonnes or less. The EniChem/Sumitomo route in Japan is said to have eliminated AS by-product, and chemical majors DSM and Rhodia are understood to have developed butadiene-based processes that produce no AS.

OUTLOOK

Nylon textile and fiber production in Europe will stay in a steady decline, so European and US capro producers will continue to increase exports to Asia. In Western Europe, demand for engineering plastics will grow by up to 5%/year, so demand for capro is forecast to continue growing by up to 1%/year. Global growth is likely to approach 3%/year.

The major issue for European producers is the continued rise in Chinese capacity, where each year brings more announcements of new plants, in a market already showing signs of overcapacity. The textile lobby succeeded in maintaining a degree of quota protection for Europe and the US until 2008, but new textile capacity in Vietnam and Africa has already circumvented these controls. It is expected that over the next few years the full effect of the global free trade in textiles will be felt, putting European textile producers under intense pressure.


EUROPEAN CAPROLACTAM CAPACITY, '000 TONNES/YEAR

Company Location Capacity
Azot Cherkassy Cherkassy, Ukraine 50
Azot Kemerovo Kemerovo, Russia 110
Azot Shchekino Shchekino, Russia 50
BASF Antwerp, Belgium 290
Ludwigshafen, Germany 170
Domo Caproleuna Leuna, Germany 140
DSM Geleen, Netherlands 250
Grodno Khimvolokno Grodno, Belarus 130
KuibyshevAzot Togliatti, Russia 180
Lanxess Antwerp, Belgium 170
Spolana Neratovice, Czech Republic 48
Ube Chemical Europe Castellon, Spain 95
ZA Pulawy Pulawy, Poland 65
ZA Tarnow Tarnow, Poland 48
SOURCE: TECNON ORBICHEM

Profile last published December 19, 2005

For the latest market prices and reports on more than 120 commodity chemicals from the leading independent pricing and market intelligence service, please visit ICIS pricing at www.icispricing.com

Data provided by Tecnon OrbiChem. Email: enquiries@orbichem.com





AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly