Expansion of impulsive caprolactam supply or demand or imbalance

Although the price of caprolactam has dropped continuously since October, traders have begun to call for losses, but on the China International Caprolactam and Nylon Forum held yesterday, manufacturers and traders are still talking about the most expansion. However, with the continuous release of production capacity in the first quarter of next year, there are also people in the industry who are beginning to worry. How long can the good days of caprolactam last?

Maintain high profit for nearly 9 months

From the beginning of this year to September, caprolactam has maintained a considerable amount of profit. The price of caprolactam was “two ups and two downs” this year, compared with prices of many basic chemicals that fell before and then fell. Firstly, from January to April, caprolactam rose from 24,000 yuan/ton to 32,000 yuan/ton due to the increase in crude oil prices and demand. After a short two-month adjustment, it rose again to 30,000 yuan from June to July. More than tons.

Fang Fang, head of the caprolactam business affairs department of Sinopec Baling Company, believes that the reason for the continuing tight supply and high price of caprolactam in the first three quarters is that the capacity expansion of downstream nylon-6 polymer continued to increase faster than that of caprolactam. Nylon-6 polymers and their fibers have better toughness and wear resistance than polyesters. In the automotive industry, Nylon-6 used as engineering plastics is gradually replacing metals, but this year due to insufficient supply of raw materials. The operating rate of nylon-6 is only 60% to 70%.

Analyst Sun Hongfang of China Textile Network told reporters that in the first 9 months of this year, caprolactam producers have maintained a considerable amount of production profits, especially during the two periods from March to April and from June to July, and the profit per ton was in the amount of 10,000 yuan. the above. Although the current price has dropped to around 24,000 yuan / ton, but manufacturers still have some room for profit.

Excessive expansion triggers excess fear

Similar to many chemical industry sub-sectors that have experienced too much work, the lucrative caprolactam also attracts more and more manufacturers to “gold rush”. However, industry insiders pointed out that the high profitability of caprolactam may be difficult to maintain under the dual threat of excessive replacement of polyester substitutes and production capacity.

Charles Fryer, chairman of the UK-based Tektronix Global Chemicals Co., Ltd., expressed his concern about China's excessive capacity expansion. According to his global production data on new caprolactam production, nearly 80% of global new production capacity will be concentrated in China next year. “In 2010, the apparent consumption of caprolactam worldwide increased by 12%. The vast majority of new demand came from China under economic stimulus policies. This growth rate completely overdrawn the global consumption this year, resulting in the apparent consumption growth of caprolactam in 2011. Almost zero."

Differing from the optimism of domestic manufacturers, Charles Fryer fears that polyester will pose an alternative threat to caprolactam under the energy factor. “Caprolactam is much more sensitive to energy costs than pure terephthalic acid (PTA) and methyl ethyl ether (MEG). When the cost of crude oil rises, if the price difference between the two increases further, the downstream will first consider using polyester rather than nylon. ”

For domestic companies have launched caprolactam projects, Deng Jun, secretary general of the Nylon Industry Branch of the China Chemical Fiber Industry Association, expressed similar concerns. He said that the caprolactam plant is more complex and has a high requirement for stability. Product production must consider various factors such as technical standards, environmental standards, and safety production. Only companies that integrate upstream and downstream resources can determine the direction of profit distribution.

Statistics show that in the domestic production of caprolactam that will be put into operation next year, there will be 400,000 tons in the first quarter, 200,000 tons in the third quarter, and 300,000 tons in 2013. Not only that, but recently listed companies such as Luxi Chemicals, China Chemicals, and Lanzhou Science and Technology also announced the announcement of their new projects for 200,000 tons of caprolactam.

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