US Chemical Profile: Nylon 6

13 July 2012 10:04  [Source: ICB]

USES

Nylons (polyamides) are the most common polymers used in fiber. Approximately 24% of nylon 6 is consumed in engineering resins, while the rest is used in nylon fibers.

Nylon 6 fibers are made into textile, carpet and industrial yarns. Nylon resins are used in engineering plastics, with applications in automotive, fabric, carpeting, sportswear, recreational equipment, electronics and industrial components and films for food packaging.

Nylon 6 resins are increasingly being used as engineering plastics because of their combination of high stiffness and strength at elevated temperatures on the one hand, and their toughness at low temperatures on the other.

They are increasingly replacing metal in automotive applications such as air intake manifolds, while their resistance to oils and greases has led to their use in engine covers, gears and bearings.

SUPPLY/DEMAND

Demand in the US market for nylon 6 over the past six months has been remarkably strong and is projected to remain strong for the second half of 2012.

The automotive manufacturing industry has been strong this year, with sales ahead of last year in the first six months, and that has been a boon for nylon 6 producers. The construction market has seen some growth, but this has been marginal.

With the mandate from the US government for more fuel-efficient vehicles, auto makers have introduced more lightweight materials, such as nylon, to reduce the weight of cars and light trucks, which in turn enables greater fuel efficiency. Buyers are not experiencing any difficulty in obtaining material as producers have not reported any significant production issues or raw material supply issues.

With the US nylon market in a stronger position than Europe and Asia, producers and sellers of nylon 6 have benefited. Producers and buyers have indicated that supply is balanced.

PRICES

Domestic prices - a hybrid of spot and contract prices - have been relatively stable in 2012, having averaged $2.05/lb (€1.68/lb) for domestic injection molding grade unfilled nylon 6 material in bulk through the end of June.

Buyers and sellers in the US nylon market would much prefer prices to be stable - as they have been since February, when prices rose by 10 cents/lb - than to see prices move up and down month after month.

Buyers said that, when pushed, some producers have been giving some price relief, although the amount of relief remains within expected levels. They added that it is easier to budget for the year and to make proposals to new customers and new proposals to current customers for new applications.

Although world feedstock caprolactam (capro) prices have fallen, the price for capro in the US has remained relatively stable.

The cost of benzene, a primary feedstock for capro, has gone against the trend of other petrochemical feedstocks by moving up in price and not retreating much in 2012. It has increased in price by 16.2% since the beginning of the year.

During the holiday-shortened week that ended on July 6, the already strong benzene spot prices moved higher. It was the second consecutive week that benzene spot prices rose.

These increases were attributed to heavy buying from traders with short supply positions; reduced production rates; light cracker feeds; and global economic uncertainty.

TECHNOLOGY

Nylon 6 is made from capro in a batch process in which capro, water and a molecular mass regulator, for example thanoic acid, are poured into a reaction vessel and heated under nitrogen at 500K (227˚C). An intermediate, aminocaproic acid, is produced while the process then undergoes condensation to polymerize the molecules.

OUTLOOK

For the remainder of 2012, and unless something drastically negative happens regarding the US and the overall global economy, the market for nylon 6 appears to be headed for more of the same demand/supply characteristics, several sources have said.

It appears the Asia nylon market has hit bottom and will begin to rebound, another source said.

The European market seems to be enjoying strength in the higher-priced automobile sector, but not anywhere else.

While most market participants would rather there were strength throughout the three regions, the US market should benefit from a rebounding nylon market in Asia and the slowdown in Europe.

Since the economic turmoil of 2008-2009, many buyers have reduced their demand for larger bulk deliveries, instead preferring to order hand-to-mouth quantities, with very little being purchased above those volumes.

Producers have recognized this and have adjusted their production schedules and philosophies accordingly.

us nylon 6 capacity'000 TONNES/year

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Author: Wesley Busch and Feliza Mirasol



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