Nylon Giant Closes Factory in China: What Signals Does This Send?

News Event

On June 17, Ascend Performance Materials, a globally renowned producer of high-performance durable chemicals (hereinafter referred to as "Ascend"), announced it will orderly shut down its adiponitrile production facility in Lianyungang, China.

Notably, the opening ceremony for Ascend’s Lianyungang production base was only held last October in Xuwu New Area, Lianyungang.

Deeper Insight

The Ascend Lianyungang production base had a total investment of approximately 4.2 billion yuan and covered an area of about 684 mu. Phase I involved an investment of around 1.29 billion yuan, primarily constructing a 200,000-ton-per-year adiponitrile plant, expected to generate annual sales revenue of about 2.86 billion yuan and taxes of about 400 million yuan upon full operation.

Tracing the timeline, the establishment of the Lianyungang plant was remarkably swift: signed in January 2022, groundbreaking in September, trial production in October 2023, and official opening in October 2024. Yet, just one year later, the shutdown decision has arrived. From “heavy investment” to “reluctant closure,” why has the factory’s fate reversed?

Why Close the Lianyungang Plant?

Phil McDivitt, Ascend’s Global President and CEO, frankly stated that this decision followed a comprehensive assessment of market dynamics and the regulatory environment. Notably, in April this year, Ascend announced it entered bankruptcy restructuring to reduce debt and optimize capital structure. Combined with ongoing trade disputes, industry cycles, and intensified market competition, these pressures ultimately led to the decision to close the Lianyungang plant.

Despite the closure of the Lianyungang facility, Ascend clearly stated that its Suzhou production base in China will continue normal operations. This arrangement may signal that its commitment to deepening presence in China remains unchanged. It is reported that Ascend expects to complete its bankruptcy restructuring process in the second half of this year and further optimize its global business structure.

This year, affected by economic conditions and industry cycles, global chemical giants have increasingly frequently shut down plants and adjusted operations. In February, Ascend had already closed its Greenwood production site in South Carolina, USA. The closure of the Lianyungang plant now means its core production capacity will further shift back to the United States.

Nevertheless, despite short-term difficulties, Ascend's technological expertise in high-performance materials remains significant. From innovative products like Starflam500 to its development of recycled polyamide materials, the company continues focusing on providing solutions for industries such as automotive, energy, and healthcare. Closing the plant may be a strategic choice to “cut losses and move forward lighter.”

How Will Market Structure Be Reshaped?

As one of the world’s top three producers of nylon 66, Ascend’s adjustments will undoubtedly impact the industry landscape. Particularly in the Chinese market, as local enterprises achieve breakthroughs in adiponitrile technology and expand capacity, import dependence is gradually decreasing, intensifying competitive pressure on foreign companies. Meanwhile, reciprocal tariffs have kept operational costs high for U.S. firms in China, becoming the final straw.

From the perspective of the entire nylon industrial chain, the closure of Ascend’s Lianyungang plant could lead to the following impacts:

Upstream: The plant was originally designed to produce 200,000 tons of adiponitrile annually. Its closure reduces global adiponitrile supply. In the short term, adiponitrile shortages will worsen, especially in the Asia-Pacific region, where companies relying on this plant will face raw material scarcity and may need to import from other regions or seek alternative suppliers.

Additionally, reduced supply and market panic may drive up adiponitrile prices. As previously seen when BASF’s adiponitrile plant halted due to electrical issues, causing supply shortages and price hikes, the closure of Ascend’s Lianyungang plant will further push prices upward.

Midstream Impact: Since adiponitrile is a key raw material for nylon 66 production, the plant closure increases difficulty and cost for nylon 66 producers to obtain adiponitrile. Some companies dependent on Ascend’s Lianyungang supply may reduce or even halt production due to insufficient raw materials.

With rising nylon 66 production costs and reduced supply, prices will increase if demand remains stable or grows. A similar case occurred when Kraton’s shutdown of its U.S. plant caused a sharp drop in dimer acid supply, pushing downstream PA66 chip quotations to a new high in 2025.

Downstream Impact: As nylon 66 prices rise, downstream sectors such as textiles, automotive, and electronics may face higher production costs. If they cannot fully pass these costs onto consumers, their profit margins will shrink. Moreover, downstream companies may encounter disruptions in production planning and delayed deliveries due to unstable nylon 66 supply, affecting customer relationships and market competitiveness.

Overall, Ascend’s closure of the Lianyungang plant will alter the regional supply structure of the global nylon industry chain. Reduced nylon raw material supply in the Asia-Pacific region may prompt local enterprises to strengthen support and collaboration with domestic adiponitrile and nylon 66 producers, promoting regional industrial development.

Meanwhile, under pressure from supply tightness and rising costs, upstream and downstream companies in the nylon chain may integrate resources through mergers, acquisitions, or partnerships, increasing industrial concentration and enhancing risk resilience.

For domestic enterprises, accelerated localization of adiponitrile production combined with Ascend’s plant closure reduces international competitive pressure, creating development opportunities for China’s adiponitrile and nylon 66 producers. How local companies seize this window period, continuously innovate technologically, and enhance industrial chain synergy—ultimately reshaping the global competitive landscape—warrants ongoing attention. (Xue Lu)