China's PA66 export grows continuously on price advantage

PA66 export grows continuously in Jan-Apr 2023

In the first 4 months of 2023, China has exported 45.4kt of nylon 66, rising 17 percentage point year-on-year. The export volume has been rising month-on-month continuously in Jan-Apr.

Except for January, the export volumes have maintained a growing trend compared to the previous two years. The export volume has grown most evidently in the month of April 2023, with a year-on-year increase of 48%.

Import-export price spread continues widening, China may become a net exporter of PA66

The export prices were dropping continuously since the year of 2022. Even when nylon 66 import prices waved down in the first 4 months of 2023, the price spread with export price was expanding dramatically, to $739/mt in April 2023. 

The decline in nylon 66 export prices are related to the lower cost of adiponitrile and declining prosperity in nylon 66 industry in China in 2022. 

In recent years, with the rapid expansion of China domestic production capacity and great changes in the supply and demand structure of PA66, coupled with the localization process of adiponitrile, the cost-side advantage is gradually magnified, so the export price continues to decline facilitating the trade to overseas markets. 

Note: The price of imported goods is calculated on the basis of CIF, and the prices of export goods are calculated on the basis of FOB, including the transportation and related fees and insurance expense before loading the goods to China.

At the same time, the production capacity of overseas new PA66 is relatively steady, and the overall supply and demand structure is stable, so import prices are maintained at a high level. From the perspective of import and export trend, PA66 are gradually getting rid of import dependence in recent years. Imports have decreased by 9.7% annually since 2018, while exports have increased by 7% annually. China is expected to complete the transformation and become a net exporter of PA66 in a near future.

Export changes by terms of trade, origin and destinations

 The proportion of processing with import materials has dropped in Jan-Apr 2023, compared to the figure in the whole year of 2022. All the lost part has gone to ordinary trade, which indicates a deeper and freer international trade of nylon 66 products.

The proportion of Shanghai, Guangdong, and Jiangsu dropped, especially the rate of Guangdong and Shanghai. At the same time, the proportion of Zhejiang, Henan and Chongqing grew evidently, with Henan's proportion rose 5.89% year on year. The increase of export from Henan, Zhejiang and Chongqing is in line with PA66 new capacities development in China, as the major giant nylon 66 enterprises, Shenma and Huafon are located. 

For export destinations, the month evidently growing regions/countries are Indonesia and Turkey. Turkey and other Southeast Asian and Middle Eastern countries have a certain increase in demand in the field of nylon industrial yarn and engineering plastics. China's chip enterprises win the relevant market competition by virtue of price advantage. The most obvious declines in exports are to Hong Kong, China and Taiwan, China, and to Japan, down by 3 to 4 percentage point on the year.

As China's industrial transfer accelerates, downstream industries in Southeast Asia and the Middle East are thriving. Nylon 66 polymer, as an intermediate product, has achieved mass and integrated production in China and has a growing edge in export. Meanwhile, the export competitiveness of Europe has declined due to energy issues. With the improvement of the quality if product, it may continue to replace some imported demand and increase exports to a certain extent.