The fourth quarter of 2016 saw a surging market for nylon industry, and the overall prices from upstream CPL to downstream textile filament rose to a much higher level. But how did nylon market that had been flat for a long time surge in the fourth quarter of 2016? How did CPL market that had suffered losses in the first half of 2016 turn around and make profits? Did end-users demand really turn better? Did downstream plants digest the increase by over 50% successfully?
Content (9 pages)
I. On the back of bull commodity market.
II. Did the better fundamentals result from less supply or better demand?
III. Downstream fundamentals turned better.
1. Capacity expansion slowed down, and the competition turned weaker.
2. Delay in credit payment was in a better condition.
IV. G20 paved the way for the market in Nov and Dec.
V. Rising CPL costs
1. Costs increased as bulk commodity market went up.
2. The surging CPL market was also promoted by benzene prices.
VI. End-users products
1. Textile filament
2. Engineering plastics
Chart 1 Wenhua commodity index weekly
Chart 2 CPL plant operating rate in China
Chart 3 CPL output in Chinese mainland in 2016
Chart 4 Nylon 6 textile filament plant operation and capacity utilization and capacity growth
Chart 5 Nylon 6 filament yarn plant debt (based on the payment when units are at full capacity)
Chart 6 Nylon 6 textile filament plant operation and inventory
Chart 7 Benzene and hydro-coking benzene price trend in East China
Figure 1 Feedstock prices and feedstock equivalence of 1t CPL
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