Navigating the Shifting Landscape of the Nylon 66 Value Chain
Invista recently announced substantial changes to the nylon 66 value chain, specifically in the production of adiponitrile (ADN) and hexamethylenediamine (HMDA) at their Orange, Texas facility in the United States. The decision comes with a projected discontinuation of ADN and HMDA production by mid-2024, marking a significant shift in the global landscape of nylon 66 production.
ADN Capacity Shifts and Industry Transformations
Looking back 30 years, the ADN industry had nine producers operating eleven plants, leading to oversupply and weak commercial performance. Over the past decade, strategic plant closings and asset sales balanced the industry, setting the stage for growth. However, recent dynamics have brought about unexpected changes. A catastrophic industrial event in Asia, which destroyed a newly established ADN plant, created a structural supply shortage, triggering substantial investments globally. By 2025, the ADN industry is poised to have 11 producers operating 14 plants worldwide, anticipating a considerable increase in capacity.
Impact on Global Trading Patterns
Rising worldwide ADN capacity is expected to reshape trading patterns, with a decline in Asian imports and U.S. and European exports. This shift is likely a contributing factor to the decision to close the Orange, Texas facility. The move underscores the dynamic nature of the industry as it adapts to new market realities.
Polymer Capacity Surge in China
Simultaneously, the polymer capacity for nylon 66 chip/resin is experiencing significant growth, especially in China. Over the last five years, Northeast Asia has witnessed a 40% increase in polymer capacity, with all new capacity additions occurring in China. Projections indicate a further 86% growth in China’s nylon 66 polymer capacity in the next five years. This surge positions China as a key player in the expansion of the nylon 66 industry.
Trade Forecasts and the Long-Term Outlook
While our forecasts indicate that North America will remain a net exporter of adiponitrile in the long term, the volume of exports is expected to decline. As the industry undergoes these transformations, understanding the implications on trade, production, and market dynamics is crucial for stakeholders navigating the evolving landscape of nylon 66.
The changes in ADN and HMDA production at the Orange, Texas facility reflect broader shifts in the global nylon 66 industry. As capacity grows, trade patterns shift, and new players emerge, stakeholders must stay informed to make strategic decisions in this evolving market. The journey of nylon 66 continues, with each transformation revealing new opportunities and challenges for the industry.
Global Director, Engineering Plastics
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