According to the monitoring of the business community, the PA66 market in 2022 began to run in a weak position at the beginning of the year at 36500 yuan/ton. As of January 2, 2023, the price of PA66 was 21750 yuan/ton, down 40.41% for the whole year, with a deep decline.
The market trend of PA66 in 2022 is mainly divided into two stages:
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The first stage: the overall decline stage. According to the monitoring of the business community, the average price of PA66 was 36500 yuan/ton on January 1, and fell to an annual low of 20750 yuan/ton as of July 29, a range drop of 43.15%. PA66 fell in the first phase of 2022 for nearly eight months. On the whole, the fundamentals of the industry weakened. Public health events affect logistics and shipping, and the geographical contradictions in Europe drive the petrochemical industry chain to fluctuate. Multiple negative factors all have a negative impact on the PA66 market to varying degrees, but the main negative factors focus on the supply and demand contradiction. As the market rose last year, the cost of the downstream industry will be under pressure in 2022. Superimposed by the impact of global inflation economic environment, small and medium-sized terminal businesses will leave the market, and market demand will be deeply trapped in the mismatch between supply and demand. At the same time, the upstream supply is relatively abundant at this stage, and the support for PA66 spot is insufficient. Superimposed by the abundant supply of PA66, the spot price at this stage is almost falling at a uniform rate.
The second stage: weak shock stage. According to the monitoring of the business community, the average price of PA66 will be 21750 yuan/ton from 20750 yuan/ton on July 29 to 21750 yuan/ton on January 2, 2023. The price will rise first and then decline, and the overall weakness will fluctuate, with an overall increase of 4.82%. At this stage, as the traditional peak demand season “golden nine and silver ten” drives the demand, boosting the trading of PA66 industry, the price rises temporarily. However, on the whole, the consumption release in the peak demand season of 2022 was less than expected. In addition, the load of downstream enterprises was low for a long time. After the price rise, the market was frozen until the middle of November, and the market fell again.
Overall, the trend of PA66 market in 2022 is mainly affected by the following aspects:
The industry maintains rapid development, and loose supply is unstoppable
In 2022, the domestic PA66 industry will continue to expand production and capacity, and the total capacity of domestic PA66 will reach 590000 tons/year by the end of 2021. In 2022, the capacity has been realized about 161000 tons/year. If the projects under construction in Shandong with an annual output of 40000 tons can be put into production on time, the domestic PA66 capacity will reach 791000 tons/year by the end of the year. Among the domestic PA66 material production capacity distribution, the basic category products are relatively concentrated. The market competition is fierce, forming a certain pressure on the market. In addition, China plans to increase the capacity of PA66 by more than 3 million tons in 2023-2027, which will keep the industry developing at a high speed for a long time. At the same time, the domestic market will gradually become more relaxed, and the supply side pressure may further pressure the spot market.
The demand side of downstream enterprises with low load dragged down PA66 market
The downstream of PA66 is mainly concentrated in industrial silk, automobile industry and other fields. In 2022, the overall demand of downstream enterprises will be insufficient, and PA66 will be in the pattern of supply and demand contradiction for a long time. At the beginning of the year, due to the high price of PA66 and the impact of the inflation environment on the real enterprises, most downstream small and medium-sized enterprises were affected by this. The profitability of enterprises was poor and the stock of goods contracted. In addition, in recent years, the overall growth rate of downstream enterprises is lower than the capacity expansion rate of PA66. In the next few years, the supply and demand mismatch of PA66 may be profound and long-term.
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Raw materials fall, PA66 cost end support collapses
Adipic acid will decline significantly in 2022 as a whole. According to the monitoring of the business community, as of January 2, 2023, the average spot price of adipic acid in China will be 10000 yuan/ton, down 19.61% compared with 12440 yuan/ton at the beginning of last year. The market will be differentiated from high to low throughout the year. In addition, the fluctuation of crude oil has driven the market of pure benzene to weaken, and the support of adipic acid feed end has weakened. In terms of adiponitrile, with the successful production of the first set of adiponitrile in China, it marks the beginning of the localization process of adiponitrile, and the planning for new production capacity of adiponitrile and hexamethylene diamine has sprung up like mushrooms. The process of China’s internal market growing out of nothing and adiponitrile gradually getting rid of import dependence is also the process of PA66′s cost support gradually decreasing. In 2022, the overall trend of PA66 raw materials will decline, and the price support for PA66 will collapse.
Future market forecast: The analysts of PA66 from the business community believe that the capacity of PA66 will expand steadily in 2022, the demand of downstream enterprises will lag behind, and the contradiction between supply and demand will gradually spread. The upstream adipic acid fell, the supply of hexamethylene diamine was unstable, and the load of PA66 enterprise was not high in the second half of the year, causing the enterprise’s loss to expand. On the macro level, the current global inflationary economic environment remains unchanged, the wide fluctuation of oil prices driven by European geopolitical conflicts, the rebound of domestic health events, and the devaluation of the RMB have all had negative effects on the PA66 market to varying degrees. To sum up, in 2022, the bad news of PA66 industry will be superimposed, and the activities will tend to be conservative, with average market momentum. It is expected that PA66 market will continue to weaken due to insufficient demand.
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