Caprolactam Market Production Capacity Spurt Growth

In 2021, it is an indisputable fact that the caprolactam market is highly competitive, and the best proof is that the production capacity is expanding but the output is decreasing instead of rising.

In the future, many new caprolactam units will be put into operation, and the industry's start-up rate will continue to be low and costs will remain high, making it difficult to reconcile the contradictions between supply and demand.

Production capacity spurt growth

According to statistics, this year, Fujian Shenyuan 200,000 tons / year, Inner Mongolia Qinghua 100,000 tons / year, Shandong Hualu Hengsheng 300,000 tons / year and Lunan Chemical 300,000 tons / year caprolactam new devices have been put into operation, coupled with the existing devices off the bottleneck expansion and transformation, caprolactam capacity has grown significantly.

By the end of 2021, the annual production capacity of domestic caprolactam will increase by 1.12 million tons compared with 2020.

In the future, there will be more units planned tobe put into operation. It is understood that after the completion of Cangzhou Xuyang Chemical project, its caprolactam capacity will reach 500,000 tons / year; Lucy Chemical 300,000 tons / year, Fujian Yongrong new phase II 300,000 tons / year caprolactam new device is expected to be put into operation in 2022;

Baling Petrochemical will build 600,000 tons / year caprolactam industry chain project; Ertokqi Jiangyuan coal coking will build a scale of 600,000 tons / year caprolactam project; Guangxi Hengyi will build 1.2 million tons/year caprolactam-polyamide integration project. The future million-ton caprolactam-polyamide joint production base will be the new normal, and the caprolactam industry is facing greater excess pressure.

Enterprises limit production to protect prices

The large increase in production capacity will inevitably lead to market share and profit space, which is also the reason why the caprolactam enterprises overhaul or reduce production in 2021 is more concentrated.

2021 caprolactam industry overall start rate gradually decline, especially since the second half of the year, with the enterprise cost pressure and production profits decline, coupled with the national energy consumption "double control The company's power supply is limited by the policy of "double control", and the caprolactam enterprises stop maintenance.

Since the middle and end of June 2021, Fangming, Yangcoal, Luxi, Lubao and other manufacturers' devices have been stopped for overhaul, Jiangsu Haili, Nanjing East, Henan Shenma and other manufacturers' devices have reduced production, and the overall caprolactam start-up rate has dropped significantly.

After October, with the increase of energy consumption "double control" policy, caprolactam overhauling devices continue to increase, the industry start-up rate dropped to about 60%.

It is because of the industry's production restrictions to support prices, 2021 caprolactam profit situation has improved, the average profit per ton of products rose to 534 yuan. With the intensification of the "in-volume", enterprises with raw and auxiliary materials, scale and industrial chain advantages will be further developed in the fierce competition.

Squeezed by the upstream and downstream

From the upstream pure benzene market, the late price is expected to rise, which will squeeze caprolactam profit margin.

It is understood that in 2022, Shenghong refining and chemical as well as the CPC Guangdong Petrochemical pure benzene plant put into operation, is expected to add capacity of 3.83 million tons / year.

In addition, the output contribution of the device put into operation in the fourth quarter of 2021 will be reflected in 2022, further enhancing the supply of pure benzene industry. However, the downstream expansion is also rapid, the status quo of pure benzene supply is expected to continue, the price is difficult to fall, the high cost of caprolactam profit margin is difficult to increase significantly.

From the downstream point of view, the main downstream PA6 polymerization capacity of caprolactam has shown a growth trend in recent years. 2021, the overall capacity of PA6 polymerization will grow around 400,000 tons/year, but the downstream demand is not released simultaneously due to the rapid growth of capacity.

At the same time, the second half of 2021 by the energy consumption "double control" impact, the industry start rate hovered at 60% to 70%. In addition, due to long-term losses, the pace of industry expansion has slowed down, making it difficult to produce sufficient lifting effect on raw materials.

Comprehensive factors, the caprolactam industry "internal volume" will become more and more intense.