Recently, the trade war between China and the United States has become the focus of public opinion. The United States has imposed retaliatory tariffs on more than 1300 items of China’s approximately US$50 billion. As a counterattack, China has imposed 25 items on 14 categories of goods such as soybeans, automobiles, and chemicals in the United States. % of tariffs, including nylon 66 (PA66) in the chemical category, pushed the PA66 into the spotlight.
PA66 is produced by the reaction of adipic acid and hexamethylene diamine, and hexamethylene diamine is hydrogenated by adiponitrile. As the most important raw material of PA66, the advanced production technology of adiponitrile is currently controlled by INVISTA, Aoxin, etc. It is INVISTA's almost monopoly on the production and trade of adiponitrile in the world. However, China currently does not have adiponitrile production capacity, and all of them rely on imports. On the contrary, another chemical product that synthesizes PA66 is a domestic production capacity for adipic acid. Excessive products, According to statistics from Chemical Online, in 2017, the domestic adipic acid production capacity was about 2.3 million tons, but the output was only about 1.3 million tons, and the operating rate was less than 60%. The oversupply situation in the domestic adipic acid market was more obvious. More companies choose to export. In 2017, the export volume was 344,000 tons, an increase of 18.6% year-on-year. It can be said that the current development of PA66 in China is constrained by this raw material, adiponitrile.
Globally, PA66 has an annual production capacity of about 3 million tons except China. Among them, INVISTA's production capacity accounts for about 70%, and the rest are mainly concentrated in several companies such as Ao Sade, Solvay, Dupont, BASF, and Asahi Kasei. In 2017, the domestic PA66 annual production capacity was approximately 540,000 tons, including 150,000 tons of capacity of INVISTA in Shanghai. In addition to the local enterprises, Henan Shenma, Liaoyang Xingjia Chemicals and Liaoning Anshan Guorui have facilities for the production of hexamethylene diamine. Zhejiang Huafeng and Jiangsu Huayang need to use hexadiane to produce PA66.
From the import perspective, PA66 is a product with a relatively high import dependence. According to customs statistics, China's import of PA66 is close to 300,000 tons per year, accounting for more than half of China’s consumption. From the perspective of the import situation in the past three years, the United States It is the largest importer, importing about 50,000 tons per year, accounting for about 17%. Singapore, South Korea, Canada, Japan and other countries are also in the forefront of importing countries. Imports account for about 10%. China's import of PA66 is relatively decentralized. If this "trade war" eventually hits, China's import of PA66 can also be replaced from other countries, with little impact on downstream demand.
From the perspective of downstream demand, with the rapid development of China's economy, the demand for PA66 is growing rapidly. PA66 is mainly used in engineering plastics and spinning, and engineering plastics are mainly used in automobiles, electrical appliances, machinery, and cable ties, etc. Spinning In the fields of cord fabrics, airbag fabrics, etc. With the continuous development of China's auto industry, China has gradually become the world's largest automotive manufacturer. With the trend of lightweight and environmental protection and energy saving, the demand for PA66 in the automotive industry is also rising. The momentum, PA66 is facing a growing gap between supply and demand.
To sum up, in a situation where import dependency is so high and the gap between supply and demand is growing, China's PA66 industry has huge room for development. The domestic PA66 industry should seize the opportunity of this 'trade war' to accelerate adiponitrile technology. The breakthrough, breaking the foreign technology monopoly, the domestic PA66 industry will usher in the spring of development.