Driving Factors

Policy Support: The state has listed high-performance engineering plastics as a strategic emerging industry, and introduced policies such as tax incentives and R&D subsidies to encourage enterprise innovation.

Technological Progress: Through independent R&D, domestic enterprises have broken through bottlenecks in polymerization processes and modification technologies, improving product performance and stability.

Market Demand: The surging demand for high-performance engineering plastics in emerging fields such as new energy vehicles, 5G communications, and aerospace has provided market space for domestic substitution.

Cost Advantage: Domestic enterprises have enhanced product cost-effectiveness and market competitiveness by optimizing production processes and reducing raw material costs.

The Following Are Some New Materials That Have Achieved Breakthroughs in Domestic Substitution

I. Nylon 66: Significant Room for Domestic Substitution of Mid-to-high-end Products

Overview of the Nylon 66 Industry

Nylon, also known as polyamide (abbreviated as PA), refers to a class of linear polymer materials whose macromolecular backbones contain repeating structural units of amide groups (-CO-NH-). Among various nylon products, Nylon 6 (PA6) and Nylon 66 (PA66) are the most widely used, accounting for approximately 90% of the total nylon consumption.

Nylon 66 is a polyamide formed by the alternating polymerization of hexamethylenediamine and adipic acid. It has a higher degree of atomic arrangement regularity than Nylon 6, enabling the formation of a strong and dense polymer structure. With superior physical and chemical properties compared to Nylon 6, it is widely applied in fields such as automotive lightweighting, downstream rail transit, and electronic and electrical industries.

Once upon a time, China's nylon 66 industry had a high degree of external dependence, with raw materials seriously constrained by others. According to Zhuochuang Information, in 2020, China's nylon 66 production capacity reached 560,000 tons per year, output reached 387,000 tons per year, with a capacity utilization rate of 69.2% (low operation level); the apparent consumption of nylon 66 was 592,000 tons, self-sufficiency rate was 65.4%, and there was a self-sufficiency gap of 205,000 tons.There are two main reasons for the supply-demand mismatch: Firstly, high entry barriers in the nylon 66 industry due to factors such as high capital demand, requirements for process accumulation, and talent training have led to an oligopolistic market structure globally. International giants such as Invista, DuPont, Solutia, Rhodia, BASF, and Lanxess Asahi Kasei account for more than 80% of the market share, making it difficult for Chinese enterprises to enter the market.Secondly, the production of hexamethylenediamine, a raw material for nylon 66, requires adiponitrile as a precursor. However, due to the long production process of adiponitrile, complex catalyst system, and the presence of highly toxic cyanide in the reactants, the technical barrier is even higher. The production of adiponitrile is completely monopolized and used by several large nylon 66 manufacturers for their own use, with only Invista (USA) selling part of the adiponitrile externally. The insufficient supply of adiponitrile has resulted in excessively low capacity utilization of nylon 66 in China, seriously hindering the expansion of production scale of domestic manufacturers.

Domestic Substitution Status of Nylon 66

• Huafon Group: It adopted the adipic acid process, constructed an adiponitrile production capacity of 300,000 tons, and realized self-supply.
• Tianchen Qixiang (a subsidiary of China National Chemical Engineering Co., Ltd.): It developed the "direct hydrocyanation of butadiene process", built an adiponitrile production capacity of 200,000 tons, and filled the domestic gap.
• Shenma Co., Ltd.: It explored a process that bypasses adiponitrile, directly producing aminocapronitrile via ammoniation and dehydration of caprolactam, followed by hydrogenation to obtain hexamethylenediamine, thereby reducing reliance on imported raw materials.

With the continuous domestic localization of adiponitrile raw materials, domestic enterprises have actively deployed the nylon 66 chip industrial chain, and the situation of external dependence on chips is expected to be significantly alleviated. Currently, China has strong import demand for nylon 66 chips. As domestic PA66 production capacity increases, imports have dropped sharply. From January to May 2025, PA66 imports decreased by 33.56% year-on-year, while exports increased by 6.54% year-on-year, and domestic products have achieved substantial substitution in the mid-to-low-end market. The nylon 66 industrial chain is expected to witness rapid expansion along with the localization of raw materials, driving the overall price center of the industrial chain downward through new supply and boosting the rapid growth of downstream demand.

II. Polylactic Acid (PLA): Domestic Market in Short Supply with Broad Application Prospects

PLA Industry Overview

Polylactic acid (PLA), also known as polylactide, is a polyester polymer synthesized using lactic acid as the primary feedstock. It is a novel biodegradable material and ranks among the earliest applications of synthetic biology in the materials sector.

The lactic acid or lactide required for PLA production can be derived from renewable resources through fermentation, dehydration, and purification processes. The resultant PLA typically boasts excellent mechanical and processing properties. Moreover, PLA products can be rapidly degraded via various approaches after disposal, offering exceptional environmental value. For these reasons, PLA has emerged as the most vigorously developed and fastest-advancing biodegradable plastic in recent years.

Polylactic acid (PLA) is an eco-friendly bio-based biodegradable material with broad application prospects, and its global production capacity keeps rising.

Benefiting from the era of green and environmental protection, the global production capacity of biodegradable plastics is steadily increasing, expected to reach 1.8 million tons per year by 2025, with a compound annual growth rate (CAGR) of 7.61% from 2018 to 2025. Among them, the growth of PLA production capacity is more rapid.

In addition, statistics from ReportLinker show that the global PLA market size had reached 660.8 million US dollars in 2019. Driven by its broad application prospects, the market will maintain a CAGR of 7.5% during the period of 2021–2026, with the global PLA market size projected to hit 1.1 billion US dollars by 2026.

In the "Lactic Acid - Lactide - Polylactic Acid" Industrial Chain

The preparation of lactide, a key raw material, from lactic acid constitutes the core link, which mainly adopts two processes: ring-opening polymerization of lactide and direct polycondensation. The level of lactide synthesis and purification directly determines the performance of the final product, polylactic acid. Only high-purity lactide can be used to synthesize PLA with high molecular weight and excellent physical properties.

Domestic Substitution Status of Polylactic Acid (PLA)

Domestic enterprises are accelerating their rise with rapid production capacity growth. From 2020 to 2024, China’s PLA production capacity surged from 89,000 tons to 309,000 tons, and is projected to reach 365,000 tons in 2025. By constructing new production lines and expanding capacity plans, domestic players are gradually narrowing the gap with international counterparts.

In recent years, the market share of domestic enterprises has been on a steady rise. A growing number of small and medium-sized enterprises are also progressing steadily, leaving substantial room for further development.