Nylon Chips Still Have Increasing Space

Driven by the good macro economy, the strong market confidence and the increasing market price of raw material CPL, the nylon chips ushered in a wave of rising price since January. The transaction price of nylon conventional spinning chips increased from 19,500 Yuan/ton to 20,400 Yuan/ton in the market. The chips price of some leading manufacturers rose to 20,500 Yuan/ton on January, 14th. In addition, the manufacturers’ inventory was not high and the operating rate increased to 80%, so the production and marketing of the chips was general. Therefore, it is expected that the market still has the rising power afterwards.

Firstly, the price of the raw material CPL greatly improved recently, which made the nylon chips price increase. On January 14th, Sinopec Corp increased the listing price of CPL for the fourth time, and the CPL was quoted at 18,900 Yuan/ton, up 300 Yuan/ton and 1,200 Yuan/ton respectively compared with the previous listed price of 18,600 Yuan/ton and the settlement price of 17,700 Yuan/ton in Dec. 2012. In addition, Nanjing Oriental Chemical Company raised the price to 18,900 Yuan/ton again, which increased 400 Yuan/ton than before. The contract price of the high-end goods in January was about 2,550-2,600 dollars/ton. In the aspect of devices, Shandong Fangming Chemical was established in a new production line of CPL on 4th, January, and its total output could reach 200 thousands tons per year and the daily capacity was more than 200 tons. A 200-thousand-ton CPL device in Nanjing Oriental Chemical Company had stoppage due to the insufficient supply of hydrogen and had to be operated at a low load on 10th, January. The CPL device was operating normally in Shandong Haili and the products were mainly liquid on 11th, January. The CPL device was also operating normally in Shijiazhuang Refining Branch of Sinopec Group and the output was 165 thousands tons per year and the daily capacity was about 310 tons. Because the CPL was lack of supply and the price rose in the sixth consecutive weeks, the cost effect of the nylon chips was strong.

Secondly, the cost effect of nylon yarn was strengthened owing to the improved raw material price in the market. The manufacturer had to raise price under the great pressure of the rising cost, the operating rate was general and the average operating rate in domestic nylon factory stayed at 70%. On one hand, the market price of low-end nylon POY85D/24F rose to 22,300-22,500 Yuan/ton in Jiangsu, China and the semi-bright nylon FDY70D/24F increased to 24,800-25,200 Yuan/ton in East China. On the other hand, the high-end goods of nylon 70D/24F was quoted at 27,500-28,000 Yuan/ton with six-month acceptance in Zhejiang market and the nylon 70D/24F rose to 24,500-25,000 Yuan/ton by cash in Jiangsu market, raised 500 Yuan/ton within a week.

Finally, the macro economy got warmer gradually. According to the statistics, the export of Chinese textiles and apparel was 24.1 billion dollars in December, an increase of 10.8% year-on-year. Among which the export of textiles and apparel was 8.572 billion and 15.529 billion dollars respectively, up 3.3% and 15.52% separately year-on-year.

Generally speaking, the cost support of the nylon chips was more powerful. Driven by the good macro news, the manufacturer inventory pressure was eased and the terminal demand had been slowly improving. Therefore, it is expected that the situation of the nylon chips will continue to boost.