Market Trends of Adiponitrile Industry
Automotive and Transportation Industry to Dominate the Market
- Adiponitrile is a nylon-66 intermediate. It is converted into nylon-66 through hexamethylene diamine as an intermediate. Nylon-66 is used heavily in the automotive and transportation sector. It is used in radiator end tanks, oil pans, air intake manifolds, etc., as it is resistant to heat, oil, and grease.
- Nylon-66 is growing in the automotive and transportation sector in under-the-hood, chassis, and exterior and interior applications. It is due to its excellent properties, like tensile strength, chemical resistance, heat resistance, and abrasion resistance.
- The increase in airbag production because of the mandatory regulations for airbag inclusions in automobiles in different countries is also expected to increase the need for nylon-66. It is thus increasing the demand for adiponitrile.
- As the automotive industry faces stringent environmental norms, nylon-66 provides better fuel efficiency through weight reduction and lower fuel emissions. It is, thus, guaranteeing the increasing demand for adiponitrile worldwide.
- In 2022, more than 85 million passenger cars were manufactured worldwide, up nearly 6% compared to 2021. However, this was still less by around 7 million units from pre-pandemic levels in 2019, per the International Organization of Motor Vehicle Manufacturers (OICA) report.
- In Europe, Germany is among the key manufacturer of vehicles. According to the German Association of the Automotive Industry (VDA), Germany produced 13,087,738 units of vehicles in July 2022, registering a growth rate of 4% compared to 2021.
- According to the OICA, automotive production in 2022 accounted for 85.01 million units. It was an increase of nearly 6% compared to the production in 2021, which was reported to be 80.20 million units.
- As per the World Economic Forum (WEF), nearly 4.3 million new battery-powered EVs (BEVs) and plug-in hybrid electric vehicles (PHEVs) were sold globally in the first half of 2022. Additionally, BEV sales grew by around 75% yearly and PHEVs by 37%. Moreover, global electric car sales crossed the 5.7 million units mark in the first eight months of 2022, and the market share of plug-in electric cars increased to nearly 15%.
- The demand for adiponitrile from the segment will likely grow moderately, owing to the temporary slowdown in the automotive industry during the forecast period.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to dominate the market for adiponitrile consumption during the forecast period due to the increase in Nylon production capacity expansion in countries like China, Japan, and South Korea.
- There are less than 100 manufacturers of Nylon 66 across the globe. Companies are entering and expanding into the market to cover the increasing demand. For instance, in April 2022, Shandong Longhua New Material announced an investment of around USD 1.1 billion to construct China's biggest Nylon 66 factory with a more than 1 million tons capacity.
- In 2022, nylon 66 chip capacity expanded by 110 kt/year, an increase of 17.4% on the year. And in 2023, the new capacity planned totals 160 kt/year.
- Nylon 6,6 resin is one of the major constituents in manufacturing different electrical & electronics, automotive, and transportation components like connectors in mobile phones, motherboards of computers, connectors, etc. The Asian region is the largest producer of electrical and electronics worldwide, with dominating countries such as China, Japan, South Korea, Singapore, and Malaysia.
- According to ZEVI, the Asian electro market reached USD 3,674 billion in 2021, a 10% rise. The market increased by 13% in 2022 and estimated a 7% growth rate for 2023. China's market is the largest in the world, even larger than the combined markets of all industrialized countries. In 2021, the Chinese market contributed USD 2,447 billion, or 41.6% of the world market. Additionally, the Chinese electronic industry expanded by 14% in 2022, and the sector is expected to grow by 8% in 2023.
- Adiponitrile is widely used in producing nylon 66 in the automobile and transportation industry. The growth in the automobile industry can be linked to the increase in demand for adiponitrile in the forecast period.
- The automobile industry in the country is witnessing switching trends as the consumer inclination toward battery-operated vehicles is on the higher side. Moreover, the government of China estimates a 20% penetration rate of electric vehicle production by 2025. It is reflected in the electric vehicle sales trend in the country, which went record-breaking high in 2022. As per the China Passenger Car Association, the country sold 5.67 million EVs and plug-ins in 2022, almost double the sales figures achieved in 2021. The market is anticipated to increase the demand for adiponitrile in the country, poised to continue sales at this momentum.
- The electric vehicles market in India is majorly driven by the two-wheeler segment, which accounted for over 48% in 2021. According to the Ministry of Road Transport and Highways (MoRTH), 329,190 electric vehicles were sold in the country, representing an increase of 168% compared with the sales in 2020. In FY 2022-23, electric vehicle sales already crossed the previous year's figures, with sales of around 4.43 lakh units between April-December. It was expected to reach over 6 lakh units by Mach 31, 2023.
- The double-digit growth in automotive production in countries like India, ASEAN Countries, and Australia is expected to contribute to the market for Nylon 66, which is expected to provide an uptrend to the adiponitrile market.
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