07 October 2013 11:35 [Source: ICIS news]
BERLIN (ICIS)--European caprolactam (capro) will become increasingly integrated with downstream nylon 6, a buyer said on Monday.
The trend is due to increased competition from Asia, meaning European producers are seeking to gain value through downstream nylon products, the buyer added.
Asia is traditionally a major importer of European capro, but this has been limited by plant expansion in Asia.
There has been speculation about how much of the planned expansion in Asia will come onstream, and about run-rates, as well as how quickly Asia will be able to produce high-spec material.
Nevertheless, the buyer said that the expansions will flood the market with capro, even if only part of the planned capacity comes onstream.
“If one in ten [of the planned Asian expansion] happens, we’re talking huge capacities. I think the quality will be there in a matter of time,” the buyer said on the sidelines of the 47th annual European Petrochemical Association (EPCA) meeting.
As a result, the buyer said, the market is likely to focus on nylon 6 and specialty grades of nylon, and see capro as an intermediate product.
The buyer echoed sentiment heard yesterday that nylon production will move into higher value chain specialty products to prevent substitution for lower cost plastics.
“Polyamide is expensive – it’s a good target for substitution. It can be replaced and that’s a threat. One way to do this [prevent substitution] is to go to specialty grades,” the buyer said.
Nevertheless, several sources said that this is unlikely to negatively impact nylon 6 or nylon 6,6 volumes as they will still be used as base resins for the specialty products.
The EPCA meeting runs from 5-9 October.
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