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11/19/2015 | 1 MINUTE READ

Takeaway from IHS Presentations on PET, and nylons 6 & 66

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Expect lower prices for PET and more competitive prices for base nylon 6 and 66 resins.

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Significant overcapacity for PET and pending overcapacity for at least nylon 6 and less so for nylon 66 over the next two years will result in flat, if not lower prices. Just one of the overall conclusions from two sessions on the shape and outlook of the global PET and commodity nylon markets. Both “Polyester Chain Update—Aromatics & Fibers” and “Nylon—The First Engineering Plastic” were presented at the recently-held Global Plastics Summit (GPS2015), co-hosted by IHS Chemical and SPI.  I’ll focus on each of the resins’ key takeaway for North America as cited by two IHS pros.

 

PET--Tison Keel, Senior Direction, IHS Chemical:

• Keel projects overcapacity for both PTA and ethylene glycol in the next five years. Expects the lower prices of these key feedstocks to benefit PET processors.

 

• Since 2012, way too much PET capacity has been brought on stream with operating rates now down to 70%.

 

• Expect overcapacity of PET to continue for a long time unless some suppliers bite the bullet and shutdown some capacity.

 

• The opportunity to buy lower cost PET resin imports still exists, but this will shrink due to domestic suppliers’ anti-dumping petition.

 

• Expect PET prices to drop in 2016. Watch for 2017—it will be a transition year—due to planned new capacity currently scheduled to come on stream in late 2016.

 

• North American domestic demand for PET will increase less than 2 percent per year over the next five years.

 

Nylon—Paul Blanchard, Director Engineering Plastics, IHS Chemical

• Currently, North America’s supply of nylon 6 is adequate.

 

• New capacity of nylon 6 slated to be brought on stream soon by Honeywell will result in operating rates dropping to 60% over the next two years.

 

• Blanchard projects competitive pricing for nylon 6 base resin but relatively stable prices for N6 compounds.

 

• Nylon 66 supply is adequate in North America

 

• Nylon 66 has been growing at a 3% rate per year. Blanchard expects this to continue with prices flat to a bit downward—with N66 base resin prices more competitive and N66 compounds more stable.

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