Nylon

Global Market Outlook on Nylon 

• The global nylon market is forecasted to reach $29 billion at a CAGR of 3 percent for the forecasted period until 2025

• The key sectors, such as automobile and electronics, faced demand destruction, due to the US–China trade war and COVID-19 impact

• The medical and packaging sectors continued to remain healthy. A gradual recovery in automotive, electronic durables, etc., would likely to drive the future growth

Nylon Demand Market Outlook

• Rising inflationary pressures, the Russia–Ukraine war, rising energy prices in Europe, fear of a global recession, the semiconductor shortage issue, rising inventory levels, and higher producer's margins/all-time high PA 6 prices in Q2 2022 will keep global PA 6 demand bearish in H2 2022 and H1 2023. The arbitrage window between Asia and other regions is rapidly expanding. Hence, buyers are advised to procure spot offers from the Asian region to maximize profitability in H1 2023.

Industry Best Practice : Nylon 

Engagement Models

• Direct and consortium buying are the two relevant engagement models in the industry

• Direct buying is highly preferred, as consortium buying (group buying) is:

–Still in the beginning stages in the nylon resins industry
–Practiced more by metals and automobile industries

Contract Models

• Market Price Contract: The commodity is supplied at a market price or benchmark price

• Fixed Contract: The buyer can decide to have a fixed margin (the margin of supplier is fixed throughout the contract period) or fixed price (prices are locked for the contract period)

Pricing Formula

Resin Producer–Converter

• Monomer Based

Nylon Price = Monthly Nylon Contract Prices + Fixed Component (Costs from Overhead, Freight, Conversion) + Premium

• Index Based

Nylon Price = Price of the Nylon Resin Quoted in the Index for the Particular Month (based on indices, such as CMAI/CDI/Platts/IHS/ICIS) + Additional Costs (based on volume, time, and clauses in purchase)

Converter–End User

Nylon Price = Nylon Resin Index Price for the Particular Month + Conversion Cost (from utilities, labor, additives, specific grade) + Margins

Global Market Size: Nylon

• The global nylon market is forecasted to reach $29 billion at a CAGR of 3 percent for the forecasted period until 2025. The key sectors, such as automobile and electronics, faced demand destruction, due to the US–China trade war and COVID-19 impact

• Medical and packaging sectors continued to remain healthy. Gradual recovery in automotive, electronic durables, etc., would likely drive the future growth

• The nylon market portrayed a strong growth in 2021, taking in the support of higher raw material prices, tight supply conditions, and healthier demand trends after witnessing lackluster market sentiments during 2020

• Concerns of supply tightness had arisen, especially in Europe and the US, for Nylon 66 had lessened, as the weak demand compensated for the gradual rise in supply

Global Capacity–Demand Analysis

The market has remained constrained globally since 2018, due to very limited capacity additions. During 2021–2022, it is operating at 85–86 percent of its capacity. 

Market Outlook

• The global nylon market is growing at a CAGR of approx. 2 percent, with Asia being the top regions for the demand growth

• In terms of two main grades in the industry (nylon 6 and nylon 6,6), the capacity of nylon 6 is more and stands at approx. 7.8 MMT/year compared to nylon 6,6 at approx. 2.7 MMT/year in 2022

• Major demand driver for nylon 6,66 is from the automotive and engineering plastics industry, while the textile industry leads the demand from nylon 6

• The impact of US–China trade issues, demand destruction, due to higher inflationary pressures in 2022, and higher crude oil prices has been witnessed during 2021–2022

• Medical and packaging sectors continued to remain healthy

Engagement Outlook

• The emerging Asian regions, such as South Korea, Japan, Malaysia, etc., could be favored as sourcing destinations, due to their healthy additions and strong supply base

• To avoid future supply risk, a diversified supplier base among different countries is preferred

Industry Drivers and Constraints : Nylon 

Drivers

Nylon application in the automobile industry

• Nylon with its superior mechanical and physical properties at lower cost offers the innovation seen in light-weight vehicles in the recent market

• For every 10 percent weight reduction in vehicle, the fuel efficiency is increased by 5–10 percent. Nylon is a major contributor to the innovation of light-weight parameters, especially in the automobile industry

• With the advent of light-weight and fuel-efficient vehicles bringing in cost reduction as well, the nylon market is looking at the collaboration of nylon producers, tier-1 suppliers, and OEMs to gain better market share

Nylon in 3D printing

• With the recent interest in 3D printing innovation, PLA and ABS were some of the resins used. However, nylon is gaining attention, due to its superior strength and durability

Constraints

Fluctuation in raw material chain

• Tier-1 raw material caprolactam and tier-2 benzene market dynamics can impart strong changes to nylon. Any disruption in the caprolactam and a benzene supply chain can translate into the supply constraints for nylon

• Caprolactam finds its major use in the nylon industry, so, any disruption in the supply chain network can mirror the same effect in the nylon market

Threat of substitutes

• For regions with focus on promoting environment-friendly products, PET, POM, and PC are some of the attractive options against nylon

• PET and other resins are currently more in demand with their varied applications in most CPG industries. Hence, with low-priced raw materials, these substitutes do have a better edge as substitutes

Why You Should Buy This Report

This report provides information on the global nylon market, demand, trade dynamics, imports, exports. It gives the regional market analysis of North America, Europe, Asia and the Porter’s five force analysis of these regions.
It lists out the nylon industry drivers and constraints and the major innovations in the nylon market. The report breaks down the cost structure, does the pricing analysis and gives the nylon 66 price trend and nylon market price. It gives nylon procurement intelligence, details the supplier landscape and does a SWOT analysis of suppliers like DowDuPont, Lanxess, Libolon (Li Peng), etc.