European nylon imports, exports fall on weak global automotive demand

European nylon imports and exports fell in May year on year on the back of persistent weak global automotive demand, according to the latest data from EU statistical agency Eurostat.

European nylon exports fell sharply in May, down 51.3%, while imports dropped 9.7%.

The decrease in imports and exports was driven mainly by the ongoing low downstream demand in the automotive sector, which is affecting chemical markets on a global scale.

“The market prices are under pressure and automotive demand is having huge impact,” a European producer said.

Since the new carbon dioxide (CO2) emissions regulations by the European Commission came into force in 2015, with stricter targets set to be ruled out from 2020 onward, there has been a significant impact on global consumption as the industry adjusts.

Demand has fallen across most regions and this has led to industry warnings for 2019 profits.

DEMAND 25-30% LOWER

“I would say there has been a remarkable drop in demand year on year, around 25% to 30% for automotive in particular - it has been a consistent but gradual drop,” said a European nylon buyer.

There has been a knock on effect on a number of markets including nylon 6, nylon 6,6 and feedstock caprolactam (capro).

Global uncertainties including the US and China trade are also having an impact on any potential recovery of demand in the automotive market in Asia, as China is the worlds largest car market.

Car manufacturer Ford is set to close six factories in Europe and Honda is to close a factory in the UK, which are not good indicators for buying interest would improve in the short term.

Nylon and capro market participants are uncertain if there will be any improvement until 2020 as the third quarter is seasonally quiet due to the summer holiday season, and so is the fourth quarter.

Some players expect there could be a slight pick-up of demand in September after the summer, but this is unlikely to recover the losses of 2019 so far.

Consumption also remains low for nylon’s other downstream industries including food packaging, textiles, and electronic applications.

As a result of low buying interest, some producers continue to operate at reduced rates.

In addition to the concerns regarding demand, nylon exports are also less attractive due to lower prices in Asia.