SunSirs: Rubber and Plastics, 2019’s PA66 Yearly Report

1. Price Trend

According to data from SunSirs, the PA66 market in 2019 is quite different from the rapid advance in 2018. The spot price of PA66 fell weakly this year, and the imbalance between supply and demand is the main feature of the domestic PA66 market in 2019.

Up to December 25, the average price of mainstream PA66 bids was around 23050.00 RMB / ton, a decrease of 36.24% from the beginning of the year.

2. Market Analysis

Some of global acrylonitrile producer has a dramatic decrease on production.

At the beginning of the year, the European petrochemical producer Ineos announced that force majeure had occurred on its acrylonitrile plant. The company announced that its ACN supply at Green Lake, Texas, had encountered force majeure, with a capacity of 545,000 tons / year. Earlier, the company also announced that it had encountered force majeure at its ACN supply in Hildesanders, UK, with a capacity of 280,000 tons / year.

In addition, Taiwan Formosa Plastics and Thailand's PTT Asahi Chemical also have their own maintenance plans in the spring. This caused the spot price of acrylonitrile to rise at that time.

Affected by rising costs, it is generally considered to be positive and supportive. However, all this happened under the weak demand of PA66. That further reduced the profit of slicer companies especially under the cost-end pressure.

After holiday, the upstream adipic acid restart and the operation rate reached to the peak. Demand has improved and the offer rebounded.

But the supply is still quite sufficient.

However, in the first half of the year, the supply continued to be abundant. Although the cost of pure benzene was intermittently favorable, the overall performance of the disk was weak. Inventory pressure is normal, and the insiders of the market have a heavier mentality to watch, and they have more space to negotiate with more orders. Trading was low, and merchants shipped at low prices.

PA66 was poorly supported by its own diacid, and the main theme of imbalance in supply and demand of domestic PA66 slices remained unchanged in the first half of the year. Downstream factories continued to pick up goods. The market is short of buying incentives, and the industry is heavier in the hollow state. Traders follow the market and the trading is more difficult. Most of the decline in the whole year was completed in the first half of the year, and the domestic market price of PA66 dropped by nearly 23.96% in the first half of the year.

The Shandong Provincial Development and Reform Commission issued a notice which reform PA66 industry.

From the end of August to the beginning of September, the Shandong Provincial Development and Reform Commission issued a notice on adjusting the adjustment of key provincial projects in 2019. It mainly involves adjustments to key projects.

Among them, Luxi Chemical's 1 million-ton polycarbonate PC project was withdrawn, adding the Tianchen Qixiang 200,000-ton nylon 66 new material projects announced on July 25.

Tianchen Qixiang is the industry leader in this year that China broke the monopoly of PA66 raw materials and laid the first adiponitrile project in Zibo. After the completion of Tianchen Qixiang's industrial base, it will break foreign technology monopoly in one fell swoop, end the domestic technology industry gap and the adiponitrile dependence on imports, and the price will be subject to the history of people.

However, this good news has made PA66 practitioners in a complicated mood. The shift of key Shandong projects to nylon 66 also means that the production capacity of PA66 continues to expand. Today, the technical barriers to adiponitrile have been resolved. In the future, the cost of PA66 will be less affected. Cost support will gradually decrease. It is expected that it will be a long-term impact on China's PA66 market. Under the background of the imbalance of supply and demand, the negative factors of cost and surface have been added, and the market trend is difficult.

The following traditional peak season of "Golden September and Sliver October" did not arrive this year as expected.

The spot supply of the PA66 market continued to be abundant. The downstream factories just needed to pick up the goods and the demand continued to weaken without improvement. The market lack in transaction and the industry is heavier in the hollow state. Most of the trading is flexible to take orders, and the actual orders are discussed in detail.

In the middle of the third quarter, the delayed release of U.S. tariffs was positive. The terminal market rebounded during the peak season, and the price of the adipic acid market rebounded and rose. It was overshadowed by the imbalance of supply and demand imbalance. The overall impact on the PA66 market was limited. Combined with the decline of PA66 this year, it makes people feel the long-term trend of increasing competition in the industry.

3. Market Forecasting

SunSirs' analysts believe that the domestic PA66 market in 2019 will be weak after falling. The reason is that the macroeconomic situation this year is indeed not good, and the downward pressure on the economy is obvious.

The China-US trade friction has a great impact on the trading atmosphere of the commodity market. However, the main reason is that the SunSirs.com believes that last year the PA66 market experienced a skyrocketing price and the downstream plant cost end was under heavy pressure, which led to a significant reduction in the entire downstream demand this year. This has appeared in the engineering plastics field, spinning field, and cable ties all decreased.

In addition, adipic acid has limited support for cost. Intermediate adiponitrile broke the monopoly, and the expansion of production capacity macro negatively affected the cost of PA66.

Multiple factors have led to an oversupply of the overall market since this year, showing a serious imbalance between supply and demand. The market is short of buying invectives and the industry tends to be bearish.

At present, the pressure on the cost of domestic polymerization plants is still too high, and the situation is more difficult. It is likely to make it difficult for PA66 to improve in the medium and long term.

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