While most chemical fiber companies are still wrestling with the energy and logistics costs of chip spinning, Hengyi Petrochemical has offered a different answer with a 4.87 billion yuan investment announcement: skip the chip stage entirely and use melt direct spinning to redistribute profits across the nylon chain. The 400,000-ton PA6 project, located in Guangxi and Hangzhou, has an 18-month construction period and is financed through a mix of internal funds and external borrowing. For the industry, the real signal is not the capacity figure but the potential cost restructuring triggered by a technology shift.
Background
Two Hengyi subsidiaries—Guangxi Hengyi New Materials and Hangzhou Yizhijin New Materials—will execute the project. Notably, the Guangxi base currently operates a 600,000-ton PA6 chip production line, which is expected to run at full capacity in 2026. Once the new project is operational, the company will extend its value chain from chip raw materials to spinning, completing a key link in the nylon industrial chain. This is not a simple capacity addition but a deep digestion and value upgrade of existing chip capacity.
The core advantage of melt direct spinning lies in process simplification. According to public technical data, the process eliminates chip packaging, warehousing, and transfer, cutting water consumption by about 80% and electricity use by 30%. This will significantly lower unit costs, especially in an era of volatile energy prices. For buyers, the pricing logic for PA6 fiber may shift from 'chip price plus processing fee' to 'marginal cost of melt direct spinning,' leading to greater price elasticity.
Industry Impact
Hengyi's move essentially pulls competition from 'capacity scale' to 'process efficiency.' Traditional chip-based producers that fail to upgrade will fall behind on costs. For a 400,000-ton project, savings on electricity alone could reach about 84 million yuan per year at 0.7 yuan per kWh, excluding water and labor savings. For small and medium chip-based producers, such cost gaps are nearly impossible to close through management optimization, potentially accelerating industry consolidation.
From a supply chain perspective, the proliferation of PA6 melt direct spinning will reshape bargaining power. Chip suppliers will face a more concentrated buyer market, while spinning capacity becomes more consolidated. Additionally, the self-developed process aligns with the green and low-carbon upgrade direction of the chemical fiber industry, helping the company gain favor with policymakers and capital markets. However, the 18-month construction period means capacity release will concentrate around 2028; if downstream demand does not grow in tandem, it could exacerbate temporary oversupply.
The international market impact is also worth noting. China's chemical fiber exports have long relied on price advantages. The cost reduction from melt direct spinning may further lower global PA6 fiber prices, squeezing traditional chip-based capacity in Southeast Asia and South Asia. Foreign trade enterprises should be aware that price fluctuations in the original market will become more frequent, making long-term contract lock-ins more difficult.