Nylon Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Nylon 

• The global demand is expected to grow at a CAGR of 2.4 percent through 2017–2022

• Broad demand drive from the automotive industry and plastic product industry is expected to trigger the nylon market growth

• Emerging economies, such as LATAM, India, and other Southeast Asian countries, are expected to drive the global nylon market

Demand Market Outlook

• The global nylon market is currently oversupplied .However, minimal expansions are in place to meet up with the increase in demand growth

Industry Best Practice

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 $32 million at a CAGR of 5 percent for the forecasted period until 2022.Automobile, electronics, packaging, CPG industries, etc., are expected to drive the demand

• The nylon market is expected to portray a strong growth in the coming years, taking in support of higher raw material prices and healthier demand trends after witnessing lackluster market sentiments during 2015–2016
• Concerns of supply tightness had arisen, especially in Europe and Asia, in line with capacity rationalization in the upstream as well as ongoing environmental regulations in China
• Among the top regions, Asia with the largest capacity share of 57 percent and 5.3 MMT/year capacity is driving the nylon market

Global Capacity–Demand Analysis

• The overall nylon business sentiments improved strongly, as 2016 ended impacting price hikes, increase in consumption trend, and better purchasing momentum
• The strong demand drive from automotive and engineering plastics sectors, along with capacity constraint issues, the nylon rebounded from the bearish outlook it portrayed during 2015–2016

Market Outlook

• The global nylon market is growing at a CAGR of 2.4 percent, with Asia being the top region for the demand growth
• In terms of two main grades in the industry (nylon 6 and nylon 6,6), capacity of nylon 6 is more and stands at ~7.2 MMT/year compared to nylon 6,6 at ~2.3 MMT/year in 2016
• Major demand driver for nylon 6,66 is from automotive and engineering plastics industry, while the textile industry lead the demand from nylon 6
• With the rebound in demand drive and buying activities, the operating rates have increased to levels between 76 percent and 80 percent

Engagement Outlook

• With capacity rationalization being targeted to wage the supply–demand gap, fixed contract models could be engaged, so as to avoid risks involving external factors, like supply disruptions