Industry chain: China produces 70% of the world's Synthetic fiber, and nylon has good growth and profitability
Classification: natural fiber, Synthetic fiber, artificial fiber. The initial product of clothing is fiber. Textile fiber can be divided into chemical fiber and natural fiber according to the different raw materials and processes required in the production process. Chemical fiber can also be divided into Synthetic fiber and artificial fiber. Natural fibers are directly composed of natural materials such as cotton, hemp, wool, and silk. Artificial fibers are made from natural materials such as cotton linter, wood, and acetic acid to form corresponding cellulose, which is then combined into cotton, silk, and wool. Synthetic fiber are usually made from various chemicals produced by petroleum refining and then through chemical reaction. The global synthetic fiber industry is rapidly expanding and migrating to China, with China accounting for over 70% of global production. After 1960, the petroleum industrialization promoted the vigorous development of the global Synthetic fiber industry. At the same time, in line with the migration trend of the global textile and clothing industry chain to China, the domestic Synthetic fiber industry grew rapidly. In 2017, China's Synthetic fiber output accounted for 71% of the world's total, and the industrial chain was prominent. Nylon is the second largest Synthetic fiber. In 2021, the total output of domestic chemical fiber will be 65.25 million tons, and the proportion of man-made fiber/Synthetic fiber will be 8.6%/91.4% respectively. From the perspective of Synthetic fiber structure, polyester occupies 89.9% of the total by virtue of its more significant cost advantage, and its output is 53.63 million tons; Nylon is second only to polyester, accounting for 7%, with a production capacity of 4.15 million tons; Spandex accounts for 1.5%, with a production capacity of 870000 tons; The remaining Synthetic fiber is less than 2%.
The unit price and profit of nylon fiber are between polyester fiber and spandex fiber. In the past decade, the unit price has declined and Gross margin has increased
1) Growth: In recent years, downstream prosperity has driven the recovery and growth of nylon and polyester. Since the former Caprolactam of nylon 6 was localized after 2011, nylon maintained a rapid growth of CAGR of 16% from 2011 to 2016, and polyester/spandex accounted for 7.2%/15.3% in the same period. From 2016 to 2018, the growth of nylon output stagnated at a high base. After 2018, driven by the prosperity of sportswear track, the compound growth rate recovered to 7.9%, while polyester/spandex was 10.1%/8.3% in the same period.
2) Unit price: After the localization of raw materials, it continues to decline, with nylon between polyester and spandex. In recent years, with the strengthening of the position of China's Synthetic fiber industry chain and the rapid expansion of production capacity, the unit price of each product has a downward trend. Based on the average value in 2021, the ton prices of nylon, polyester and spandex are respectively 19891, 8990 and 67740 yuan, and the price of nylon is between polyester and spandex.
3) Gross margin: Nylon is between spandex and polyester, and the center has been rising in the past 15 years. According to wind statistics, from 2005 to 2010, the Gross margin of nylon fiber was between 6.5% and 9%, with an average of 7.9%. After the previous localization of Caprolactam in 2011, the Gross margin increased significantly from 2011 to 2015, with an average of 9.9%, and the gap with polyester fiber widened significantly. According to the average Gross margin of listed companies, from 2012 to 2016, the Gross margin of nylon fiber fluctuated between 10% and 14%, with an average of 11.5%, 5.5 percentage points higher than that of polyester fiber and 6.7 percentage points lower than that of spandex fiber. After 2018, the Gross margin of nylon fiber is normally around 13%, 2.7 percentage points higher than that of polyester fiber.
Nylon industry: In recent years, the growth of fiber production has accelerated, and the concentration of leading enterprises is high
After the high base adjustment in the early stage, the industry has resumed high growth in the past three years. In 2021, China's nylon fiber production reached 4.15 million tons, accounting for nearly 60% of the global proportion, and it also has a strong voice in the global industrial chain. Reviewing the growth process of the industry, around 2011, a breakthrough was made in the localization of Caprolactam, the upstream raw material of nylon fiber, and then the industry entered a rapid growth period. The compound growth rate was 16% from 2011 to 2016, slowed down from 2016 to 2018 under a high base, and the compound growth rate has recovered to 8% since 2018 driven by the prosperity of downstream sports tracks. From the perspective of product structure, nylon fibers are divided into nylon 6, nylon 66, nylon 610, nylon 56, etc. Among them, the production of nylon 66 is about 390000 tons (about 40000 tons of civilian silk), and the production of nylon 6 is about 3.18 million tons (about 2.23 million tons of civilian silk). The specific analysis will be further analyzed in the "Nylon 66" chapter. The concentration of the top five manufacturers is about 40%, and Taihua New Materials has grown rapidly with a high degree of capacity differentiation. From the perspective of domestic nylon fiber production pattern, the production capacity concentration of the top two manufacturers is 25%, and the production capacity concentration of the top five manufacturers is 40%. The industry concentration is relatively high, with Jinjiang and Hengshen having actual production capacity of 400000 tons and 330000 tons respectively. In recent years, Taihua New Materials has grown rapidly, with an actual production capacity of about 70000 tons before 2020. The "120000 tons of nylon filament" project, which started construction in mid 2019, was completed in early 2021, At that time, the actual production capacity climbed to about 130000 tons (including nearly 20000 tons of nylon 666000 tons of physically regenerated nylon), ranking fifth in China with a significantly higher degree of differentiation.