The wave of localization in the nylon 66 industry chain is coming.
Time:
2024-11-12
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The localization of adiponitrile is expected to drive the rapid development of the nylon 66 industry chain.
Adiponitrile is a key intermediate for producing nylon 66, with significant technical challenges, and its supply has long been monopolized by overseas companies. Nylon 66 has superior material properties, and the lack of domestic adiponitrile supply has largely restricted the development of China's nylon 66 industry. In recent years, with technological breakthroughs from companies like China National Chemical and Huafeng Group, the localization of adiponitrile has entered a phase of accelerated growth, which is expected to expand the nylon 66 industry chain and create new development opportunities for related industries and companies.
The nylon 66 market has great potential, and breakthroughs in the localization of adiponitrile are expected to drive downstream growth.
Nylon 66 is a high molecular polymer with excellent comprehensive properties such as shock resistance, heat resistance, wear resistance, and corrosion resistance. It is widely used in engineering plastics, civilian silk, films, and other fields. It is an important material for achieving lightweight automobiles and is also an ideal material for high-end yoga clothes, quick-drying clothes, elastic nylon outerwear, and jackets. According to IHS and Baichuan Yingfu, in 2020, the overseas (excluding China) production of nylon 6/nylon 66 was approximately 3.45 million/2.47 million tons, while domestic production of nylon 6/nylon 66 was 3.85 million/330,000 tons, indicating that the development of domestic nylon 66 is insufficient compared to the overseas market, with significant potential demand.
The localization technology of adiponitrile is flourishing, with planned production capacity approaching 3 million tons per year.
For a long time, the development of China's nylon 66 industry has been limited by insufficient supply of adiponitrile, with slow growth in domestic production capacity and nylon 66 prices remaining higher than nylon 6, restricting downstream demand development. Since 1970, China has begun to introduce and develop adiponitrile production technology. In 2015, Tianchen Engineering, a subsidiary of China National Chemical, successfully developed adiponitrile production technology with independent intellectual property rights, marking a breakthrough in domestic adiponitrile. Since then, the localization of adiponitrile has accelerated. As of July 2022, in addition to China National Chemical (butadiene method), many domestic companies, including Huafeng Group (sebacic acid method, 200,000 tons/year already in production), Hubei Sanning (caprolactam method), and Beijing Daosike (methanol and butadiene two-step method), have diversified their adiponitrile production routes, with planned domestic production capacity approaching 3 million tons per year, signaling the arrival of the adiponitrile localization wave.
The adiponitrile-nylon 66 industry chain is set for significant development, expected to illustrate three types of industrial logic.
Under the trend of domestic raw material localization of adiponitrile, the domestic nylon 66 industry is experiencing a peak in investment and construction. As of July 2022, the planned domestic nylon 66 production capacity exceeds 5.6 million tons per year. We believe that against the backdrop of significant expansion across the entire industry chain, the nylon 66 industry chain is likely to illustrate three types of industrial logic: (1) the 'selling shovel' logic.
From the production of adiponitrile to the polymerization and spinning of nylon 66, there are many planned capacities, driving growth in equipment and engineering service demand.
(2) The logic of increasing domestic market share.
Supply creates demand, and domestic companies are rapidly expanding production to seize industry incremental shares.
(3) The logic of value transfer in the industry chain.
The expansion of supply is expected to drive down the price center of nylon 66 chips, transferring the value of the industry chain downstream to engineering plastics and civilian silk segments.
Real-time information
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2024-09-26