The nylon 6 (PA6) and nylon 66 (PA66) markets have experienced a tremendous contraction in supply since the fourth quarter. Facing multiple disruptions, many producers declared force majeure (FM) during the past few months. And the situation is unlikely to get better soon after Ascend experienced fire at its plant in Pensacola, Florida, USA.
The company reportedly experienced a fire during early May, 2021, likely caused by severe weather. And it is understood that the fire was contained relatively quickly. Because of the incident, the company noted it will keep its FM in place on polymers and compounds.
In April, BASF also declared FM because of lack of raw materials. And DuPont is also on FM on several of its engineering resins, including PA. If other producers have not declared FM, they have certainly placed customers on allocations.
From a buyer’s perspective, the battle to secure volumes continues amid panic buying and buoyant downstream markets. In fact, the situation is so severe that prices are no longer a priority. The situation is so bad that many risk having to halt production because of lack of raw materials.
While visibility is extremely low, it is unlikely that normality will be restored before the summer. And there is a good chance that in the second quarter the markets could become even worse than they have been during the past few months.
Ascend Performance Materials produces nylon resins and intermediary products. PA6 and PA66’s main markets are automotive and electrical and electronics. Both markets experienced a surge in demand during the pandemic.
However, signs are growing of a slowdown in demand from the automotive sector because of the shortage of semiconductors. But for now, the PA market is very short and sellers are unlikely to feel the impact from a slowdown in automotive production.