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Insight | Time: Oct 28 2020 10:30AM
Nylon fishnet filament and cord fabric tough supports that ignored
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Fishnet filament
The wave of price rising in October was mainly due to the rise of the textile industry, which drove up downstream purchasing power and caused prices to rise. However, according to nylon 6 chip factories, fishnet filament factories were not as active as other sectors. There are two main reasons possibly causing the situation:

First, fishnet filament factory completed a certain degree of stocking in September.

Compared with other areas in the downstream of nylon, fishnet filament has been a relatively stable industry. Generally speaking, it is unlikely to pop up rapidly as modified plastic and film industries, while it is either not be particularly affected by the pandemic like other textiles. Therefore, it has been playing a stable role this year, which has also affected the company's procurement strategy to a certain extent. The main guiding ideology is to proceed step by step and follow long-term laws. Therefore, in the early September of “the Golden September and the Silver October”, the fish net filament factories already carried out relatively sufficient stocking, and stayed calm when unexpected rise happened in October.

Second, the recent tumultuous news about the fishing ban in the Yangtze River Basin also suppressed the market in October.

The document issued by the Ministry of Agriculture at the end of 2019 stipulated the ban on fishing in the Yangtze River. According to the implementation rules of various regions, they have been promulgated from the middle of 2020. The fishing ban period lasts as long as ten years. Although it is still uncertain how large the loss of demand caused by this policy will be, the implementation of the policy will still have a certain psychological impact on related enterprises. Also affected by this news, fishnet filament factories stayed tepid facing hot sold chip in October.

Cord fabric
Nylon 6 cord fabric market is actually more similar to engineering plastics. In fact, it has maintained strong demand since China domestic pandemic was controlled. However, due to the limited production capacity of industrial filament and cord fabric in China, even if the operation has been maintained at full capacity, the impact on chip consumption will not be obvious. Another reason for the good demand in cord fabric is also related to the pandemic, as residents opted to use bicycles and electric bicycles more than public transportation.

This is not just happening in China alone, as the overseas bicycle market also sees a significant increase in consumption. China's bicycle export volume has continued to increase significantly year-on-year since May, and the year-on-year growth rate exceeded 40% in July.

In addition to bicycles, due to the development of infrastructure, commercial vehicles (truck) are also the main driving force of nylon 6 cord fabric consumption. The following statistics are based on the data of China Association of Automobile Manufacturers.

From January to September, among the main types of commercial vehicles, the production and sales of passenger vehicles declined slightly compared with the same period of last year, and the trucks continued to maintain rapid growth.

Thanks to the high growth in consumption of bicycles and commercial vehicles, the demand for nylon 6 cord fabric is strong. In addition, the recent pandemic in India continues to ferment, affecting the production of cord fabric factories. A considerable part of orders in the international market have been shifted from India to China. According to the current estimates of relevant downstream manufacturers, the good situation of domestic sales and exports will continue before the end of the year.

From a general perspective, although the major rise and fall in nylon market still depends the bulk of demand from filaments and engineering plastics, it is undeniable that demand from niche fields such as fishnet and cord fabric have effectively helped stabilize the nylon industry in the special year of 2020.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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