OUTLOOK ’12: China capro supply to grow on new capacities in 2012

10 January 2012 05:32  [Source: ICIS news]

By Adele Zhu

SINGAPORE (ICIS)--China’s caprolactam (capro) supply is expected to increase to 1.3m tonnes in 2012 from 1.15m tonnes in line with high import volumes and new capacities that are scheduled to come on stream this year, industry sources said.

The country is expected to import 620,000 tonnes of capro in 2012, which is a growth of 0.8%, while its domestic output is expected to grow by 28.1% to 680,000 tonnes, according to data from Chemease, an ICIS Service in China.

Capro imports in 2012 are expected to remain at high levels because of the lower rate of anti-dumping duties (ADDs) on imported capro since October 2011. In addition, the appreciation of the Chinese yuan will help promote capro imports.

China’s new and expanded capacity under construction totals 925,000 tonnes/year of which 425,000 tonnes/year will be started up in 2012 and the remaining 500,000 tonnes/year will be brought on stream in 2013, according to market sources.

Juhua Group is planning to bring on line a 25,000 tonne/year expansion at Quzhou in Zhejiang province in early 2012.

Zhejiang Hengyi is planning to start up a 200,000 tonne/year capro plant at Hangzhou in Zhejiang province in the middle of 2012, while Sinopec Baling has plans to debottleneck its 200,000 tonne/year capro plant at Yueyang in Hunan province to add 100,000 tonnes/year capacity this year.

In addition, Shandong Haili Industrial delayed the start-up at its 100,000 tonne/year plant in at Zibo in Shandong from December 2011 to some time this year.

Capro is used in the production of nylon, which is widely used in the manufacture of hosiery, knitted garments, threads, ropes, filaments, nets and tyre cords.

Nylon 6 (polyamide 6) chips, the main downstream of capro, are used to make other downstream products namely, textile yarn, industrial yarn, engineering plastics and packaging film materials.

In the domestic Chinese market, prominent downstream products are tyre cord fabric, which is used in the industrial sector; and textile yarn, which is used in the textile and clothing sector.

Demand from the downstream nylon 6 market, which itself will see large scale capacity expansion in 2012, is expected to remain strong in 2012.

China’s total demand from the capro downstream market is estimated to be at around 1.34m tonnes in 2012, while the country’s consumption of the product from the nylon 6 chip sector alone will increase by 37.5% year on year to 1.1m tonnes.  

The consumption from the nylon 6 tyre cord sector in 2012 is expected to remain stable at 240,000 tonnes with no planned capacity expansions in the sector.

In 2013, the total consumption of capro from two sectors will be flat at around 1.3m tonnes, according to Chemease data.

Additional reporting by Angeline Zhang

For more information on capro and nylon, visit ICIS chemical intelligence
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Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections


By: Adele Zhu



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