Plant Economics
Maintaining a competitive position in the market is key to our collective long-term success.
AdvanSix plays a critical role in global supply chains, innovating and delivering essential products for our customers in a wide variety of end markets and applications that touch people’s lives, such as building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives and electronics. Our key product lines are Nylon Solutions (Nylon 6 resin and caprolactam, a key material used in the production of Nylon 6 resin), Plant Nutrients including our ammonium sulfate fertilizer, and Chemical Intermediates, which includes phenol, acetone and many others.
Our Chesterfield site is a main driver for Nylon Solutions at AdvanSix.The global market for Nylon 6 resin and caprolactam has undergone significant change over the past decade. Following a peak in 2011 through the first half of 2016, nylon and caprolactam prices experienced a cyclical period of downturn as Chinese manufacturers entered the market and increased global supply at a time when demand growth remained relatively stable. As a result, margins – or the profitability generated by the price of our end products (Nylon 6 resin and caprolactam) relative to cost of inputs – were compressed over this period.
Since 2016, we’ve seen continued volatility and cyclicality in the nylon markets leading to further fluctuations in industry profitability. Nylon end-uses (such as carpet, textiles, packaging and engineered plastics) are sensitive to consumer demand, which was softer overall through 2023, particularly in consumer durables and residential end markets. For the full year 2023, global industry margins declined more than 30% compared to 2022.
Ensuring good discipline in managing our costs overall is key to remaining competitive in what remains a dynamic market environment.