December 21, 2018 12:00:00 AM
Nylon 66: Pricing & Supply Issues Spur Processors to Consider Alternatives
Plastics Technology (December 21, 2018)
While the nylon 66 tightness may not prove long-lasting, resin suppliers, compounders, and distributors have mobilized to offer processors an array of ‘replacement’ materials.
In the last couple of years, a developing global supply/demand squeeze in nylon 66 has led some engineering thermoplastic suppliers, compounders and distributors to be on the ready to address continued capacity constraints and higher prices with alternative engineering resins. Chief among these options are nylon 6, PBT, and high-performance nylons like PPAs, as well blends containing increased recycle content. While there are varying projections, most sources anticipate the nylon 66 tightness to continue through to at least part of 2020.
The resin constraints are primarily related to tight supplies of key precursor adiponitrile (ADN), for which current global capacity, estimated at about 3.8 billion lb, is produced by four major players: Ascend Performance Materials and Invista in the U.S.; Butachemie, a joint venture of Invista and Solvay in Germany; and Japan’s Asahi Kasei. An explosion in 2015 at a Chinese ADN plant took out 18% of global capacity. The ADN issue appeared to have landed prominently on nearly everyone’s radar from hurricane season 2017 through 2018, starting with unplanned disruptions in production of ADN and nylon 66, all of which have been largely resolved by now, according to Houston-based IHSMarkit’s Brendan Dooley, global director for engineering resins.
By midyear 2018, nylon 66 prices were up more than 50% from 18 months before. In 2018 alone, there were first-quarter and third-quarter price hikes of 15-20¢/lb. Fourth-quarter price hikes were underway at press time in some parts of the world, and first-quarter 2019 increases would not be surprising. Planned 2019 outages, according to Dooley, include six-week shutdowns in the first and third quarters at Invista’s Victoria, Texas, plant and Butachemie’s German plant, each for the retrofit of new ADN technology.
The good news, according to Dooley, include the some key ADN capacity additions. At Pensacola, Fla., Ascend, the world’s largest fully-integrated nylon 66 player, brought on 110 million lb of ADN in 2017; is soon slated to bring on another 80 million lb; and plans a 360-million-lb expansion by 2022. The 2019 ADN plant retrofits by Invista and Butachemie will each result in a 10% output increase. And Invista Shanghai is scheduled to bring on stream a new 661-million/lb ADN unit in 2023. Dooley ventures that these actions will translate into some nylon 66 supply improvement by mid-2020. For next year, he projects a continued tight supply/demand balance and potential price relief based on either more supply or less demand.
In October, Ascend released a statement that it says was spurred by “conflicting reports on long-term PA 66 availability” in order to restate its commitment to meeting increased market demand for nylon 66 for the automotive, E/E, cable-tie, consumer and industrial markets. The statement also noted, “The fact remains that PA 66 provides the best mix of value, performance and processability among the various thermoplastics available today. Replacing PA 66 with another material has costs beyond availability and price.” Conceding that nylon 66 availability is “constrained for the short term,” the company said it’s working with customers to help relieve that constraint where possible. It added that its acquisition of Dutch plastics compounder Britannia Techno Polymers, which specializes in proprietary nylon compounds, is running at full capacity to serve its European customers. Similarly, its Foley, Ala., and Greenwood, S.C., plants are producing at optimal levels to support customers with compounds and fiber; and production at Pensacola, Fla., following the mid-July force majeure action, was at around 90% of capacity.
BASF, meanwhile, is committed to the nylon 66 market, as it continues to see significant global growth potential, according to Mark Szendro, marketing director for performance materials transportation in North America. “We are continuously pursuing all options to source products along the nylon 66 value chain. However, the reality is that demand is outstripping supply and this will continue for the next several years. This is why BASF is investing in the future with our planned acquisition of Solvay’s polyamide business. The purchase would strengthen BASF’s polyamide 66 value chain through increased polymerization capacities and backward integration into the key raw material ADN.”He added that BASF recognizes the need to pursue alternative materials in the interim and is working closely with customers to identify specific applications that could use alternative materials such as nylon 6, PBT or PPA.
Sources at DowDupont, while acknowledging a temporary tightness in the nylon 66 supply chain, report that they have maintained an uninterrupted supply of nylon products and remain confident in their ability to continue supplying long-term customers with Zytel nylon 66 resins. They noted that the company is the only major nylon 66 supplier with world-scale polymerization and compounding in North America, Europe and Asia.
They also touted their long-established strategy of Zytel “Global Grades”—products made to uniform recipes and specifications at the company’s global locations, which allows for backup from alternate sources. They noted that they have developed a flexible network of suppliers for the key raw materials to ensure they are not dependent on a single upstream asset in any of their product lines.Still, added one company source, “It’s possible that supply will be tight for the next year or two. We have not seen a situation as acute and long-lasting as this has been.”
A sampling of these and other engineering thermoplastics suppliers, compounders and distributors were asked to weigh in, both on their view of the constrained resin situation and their readiness to assist customers with alternative materials where feasible. Nearly all concede that the automotive sector posed the most concern due to the many applications for which nylon 66 is specified and because specification of any replacement cannot occur overnight.
Although industry sources concede that several nylon 66 component manufacturers and end-use OEMs are evaluating alternative materials, actual replacement to date appears to have been quite limited. One reason, according to Chris Wilson, v.p. and head of crystalline business for Solvay Specialty Polymers, is that making a switch is no small feat. “Switching from nylon 66 to an alternative material is generally not as easy as just dropping a new resin into the machine. Oftentimes, potential impacts on dimensions, part features or the performance of the part need to be considered. Choosing a supplier that can provide technical and application development support should be part of the decision as well.”
Still, nearly all industry sources contacted concede that they have customers expressing concern about the higher prices and the resin tightness. Sources at PolyOne Corp., Avon Lake, Ohio, reported that they saw this concern in early 2017, when nylon started getting tight, with customers asking for market data, price forecasts, and details on supply constraints. By the same token, PolyOne sources maintain that very few customers have switched to other resins. Said one, “We have some customers who are trying nylon 6, but the more dominant switch is from prime to recycled or wide-spec nylon 66.”
Added Steve Bowen, president of PolyOne’s PlastiComp business: “The supply of nylon 66 has been tightening for over a year, which has required close management to ensure there are no supply disruptions for us. Our long-term partnerships with key suppliers are helping us navigate during this critical period. We have been able secure sufficient nylon 66 material necessary to maintain our core business while also growing some additional segments.”
Solvay’s Wilson said the nylon 66 supply tightness has opened their eyes to a risk they previously had not seen. “I think the industry had taken it for granted that there would be an unlimited supply of nylon 66, and this thinking has now clearly shifted. An automotive customer commented to me that until the situation is resolved they are actively steering development projects away from nylon 66 and into other resins, even if it requires some part redesign.”
According to Wilson, Solvay already has several active developments underway to help customers convert to other resins in the company’s portfolio. “Typically, nylon 66 users try to substitute with products based on PP, nylon 6, or PBT. If these polymers cannot meet the technical requirements, or if costly retooling is required, they then turn to high-performance nylons such as our Omnix HPPA, Ixef PARA, or Amodel PPA.” He added that there are several advantages to moving up the performance pyramid from nylon 66 with such materials. Parts can often be made with thinner walls and therefore use less resin making parts lighter with an overall lower cost and without the need for new or modified tooling. Wilson noted that the surge in nylon 66 pricing has significantly narrowed the price gap versus high-performance engineering resins.
Jose Chirino, technical director of the Americas region for the high-performance materials business unit of Lanxess, reported that for several months, the company’s sales and technical teams have been engaging in frank discussions with customers about the material selection process. “We’ve found that many times the chosen material is more historical than truly engineered into the application. We have questioned this approach and had success in switching customers who are seeing a surge in their part cost due to raw-material increases and are concerned as well about short and mid-term material availability. But apart from cost and availability issues, many nylon 6 and PBT grades can nowadays meet crucial requirements with regards to properties, such as mechanical or thermal performance, surface quality and flame retardancy.”
As reported in a PT blog in July, director of applications development Cliff Watkins of resin distributor PolySource, offered key talking points on this issue to inform customers and to discuss its nylon 66 replacement offerings, which include, nylon 6, PBT, PPA, and aliphatic polyketone.
A different take comes from Alex Fung, president of resin distributor Conventus Polymers: “Customers are concerned that this could continue into 2020. Customers continue to see repeated price increases on nylon 66 and even nylon 6. Sure, there are alternative resins to use such as PBT or nylon 6, but nylon 66 offers a unique combination of properties and value that may make it difficult to replace, so you’ll want make sure you account for these differences. There is no free lunch in plastics.” Fung maintained that the company’s extensive experience in dealing with these kind of supply issues, led it to buy ahead. “We have ample inventory of nylon 6 and nylon 66 grades, so we are welcoming prospective customers.”