Following the widespread disruptions caused by the COVID-19 pandemic of 2020, you could forgive polyamide market participants for thinking 2021 would not match last year in terms of frustration and disbelief. In some regards, however, the six-month period of 2021 was more chaotic and confusing for polyamide market participants.
The first six-months of 2021 presented new challenges to the global marketplace – some temporary and some more rooted in structural imbalances across many industries. For polyamide 6, key factors that shaped the market in the first half of 2021 included:
The first two points are linked – supply chains have become a nightmare for every industry, including petrochemicals. Demand for polyamide 6 was characterised as very strong throughout the first half of 2021 following on from a very good performance in Q4 2020. Manufacturing ground to a halt in Q1-Q2 2020 during the initial COVID-19 lockdown periods, which forced petrochemical and polymer market participants to reduce operations or temporarily idle facilities. There was also a period of de-stocking throughout the value chain as economic activity slowly increased again in Q3. Therefore, stock levels were still below normal at the start of 2021.
In addition, there were some severe production issues to deal with as well that added to the already growing supply chain imbalances. The deep freeze in Texas sent a shock through the entire industry, and it took time for the issues created by that event to be rectified. Production of caprolactam and PA 6 impacted by the storm did not fully recover for about three months. In Europe, several producers have experienced limitations with caprolactam and polymer production at various times in 2021. There have also been shortages of compounding materials like glass fibres or fire retardants that have led to longer lead times or product allocation.