A realistic Manufacturing Problem when Suppliers Leave the Market
Italicized is my take on the issue. It is something I might do when I ran into similar issues as a Purchasing Manager or Supply Chain Manager.
The resin market story you’ve been reading about all spring is real. Benzene is approaching $5 a gallon, caprolactam is up $380/mt in a single week. Brent is above $100 on a Hormuz stalemate that can be adequately described as Schrödinger’s Strait, both open and closed at the same time, depending on the observer’s view and agenda. Every trade publication has covered the feedstock side of this cycle, and they should, as it’s quite serious.
But while everyone was watching upstream, something else happened in the PA66 and PA6 markets. Something quieter, more structural, and in some ways more consequential for the buyers who haven’t been paying attention.
- PA6: (Polyamide 6) is a versatile, semi-crystalline thermoplastic commonly known as Nylon 6. It is widely used in engineering, manufacturing, textiles, and 3D printing due to its high tensile strength, excellent wear and abrasion resistance, and good thermal and chemical tolerance.
- PA66: (Polyamide 66 or Nylon 66) is a high-performance engineering thermoplastic. Known for its exceptional strength, rigidity, and resistance to heat and wear, it is widely used as a durable metal replacement in automotive engine parts, electrical connectors, industrial machinery, and heavy-duty consumer goods.
Both are used in automotive. If you run short on PA6 and PA66 resins, the industries using it starts to run short of parts. Shortages occur and prices increase. Instead of me calling the supplier, Ford, GM, or Chrysler calls the OEM assigned supplier. Evenually we get some parts to satisfy production.
Three events. Sixty days. Same supply base.
On April 30, Lone Star Funds completed its acquisition of RadiciGroup’s High Performance Polymers and Specialty Chemicals businesses, a broad PA6, PA66, and specialty nylon platform with global reach. On May 12, Lone Star completed its acquisition of DOMO Engineered Materials, another significant PA6 and PA66 producer. And in between, Celanese announced it is closing its 55,000-metric-ton-per-year PA66 polymerization unit in Singapore after July 2026, while reducing operating rates at facilities in Richmond, Virginia, and Parkersburg, West Virginia.
So, it appears Lone Star Funds is an investment firm and not a manufacturer. It does not bode well for industries using PA6 or PA66 resins for nylon parts and having to plan with Lone Star
Other Sources: Resin Price Increases in 2026: Why Buyers Need to Play Defense Now
None of these made front-page headlines. None of them are feedstock stories. All three are resin procurement stories, and they matter more to what PA66 buyers pay in Q3 and Q4 than anything currently happening at the Strait of Hormuz.
The consolidation problem
Think about what happened to airline routes when major carriers merged. Before consolidation, if two airlines flew the same route, buyers had real competitive options. After the merger, they had one carrier, one price, and switching costs that made alternatives feel expensive even when they existed. DOJ research consistently found that fares on consolidated routes increased within 24 months of merger completion. This is not because costs changed, but because the competitive structure did.
The Lone Star roll-up of DOMO and RadiciGroup is the same dynamic. These were independent producers that buyers could play against each other in negotiations. Now they’re a single platform. The supplier list looks the same on paper. The competitive pressure between those two names will disappear.
That’s not a crisis. A better-capitalized, more operationally stable nylon supplier has real value in a volatile market. But buyers who built their PA66 or PA6 sourcing strategy on a two-supplier model with DOMO and RadiciGroup as competing legs need to revisit that model now and must not wait until after it’s already changed the negotiation.
The Celanese closure Is dated and specific
The consolidation is a structural shift that plays out over time. The Celanese Singapore closure is more immediate. It is announced. It is dated. It is this quarter.
55,000 metric tons per year of PA66 polymerization capacity doesn’t move to another plant. It doesn’t get replaced by import supply next month. It exits the global supply pool in July, during a period when benzene and caprolactam are both elevated, and demand, while mixed, remains supported in automotive and industrial end markets.
Combine that with the rate reductions at Richmond and Parkersburg, and you have a supply network with materially less buffer than it had entering the year. Again, not a crisis, but a system with less slack. And in a tight market, less slack means the next disruption hits harder.
What to do before enjoying fireworks this July
The buyers who come out of the second half of 2026 in a strong PA66 position are the ones acting on this now, not after the Singapore unit goes offline.
That means auditing H2 volume positions against open contracts this week. It means rebuilding the alternates map. Ask yourself, who qualifies as the second-leg supplier now that the Lone Star platform has consolidated DOMO and RadiciGroup? BASF, Ascend, AdvanSix, and Lanxess all deserve a fresh look. And it means engaging suppliers on H2 pricing before August, when the leverage dynamic looks different.
The author make some good suggestions for supply chain planners and buyers. One problem is the end manufacturers nay be using an OEM supplier, In which case the Buyer has to go all the way back to Ford, GM, or Chrysler. Typically, a Tier one supplier to OEMs does not have the authority to tell an OEM supplier what to do. It gets interesting. Been there and done that.
This would be less of a problem if this were not happening in just about every business. In this post-antitrust era, just about business is either dominated by a handful of suppliers or is likely to become dominated by a handful of suppliers. The capital glut means that it is much less expensive to buy out one’s competitors than to improve one’s product and win a competitive edge that way. One of the few profitable applications of artificial intelligence is to build a protective moat around one’s product and ice out competitors. Having stopped antitrust enforcement, we’re in a technologically and artistically stagnant age.
Kaleberg:
Much of automotive is based upon pricing first and then capability. The last thing the car makers what to do is own the manufacturer. Far easier to pass on the issues to a designated Tier 1 and let them struggle.
My German boss wanted to take away one product from the manufacturer. I told him not to do it unless you are going to take all the other items which were far lower volumes. Being the overbearing guy, he was, he insisted. A jackass engineer suggested we do this.
There are just stupid things which are proposed which have other consequences. The high-volume part paid for the other items. You move the main part and you will pay more for the other parts or be forced to move them.
What was interesting was, the supplier figured out what was going on, He looked at my boss and basically told him to his face he knew (without me telling him), we were not the issue. I did not tell him (redundant alert). He cornered the Germans.
Another time, I walked into a meeting and there were 30 people there who wanted to make the component we had sourced elsewhere. I was cornered. So, I told them, you can quote the item again. They did and their price was still too high. I told my German boss, he could give the item however the price would be much higher. The supplier we selected had better capabilities and access to materials. I won again.
I cost modeled plastic parts and stampings.
Years later, I ran into the Salesperson for that company. He recognized me in the restaurant my son and I were eating in. It was then, I found out the impression I made by telling them they could bid the part again. He said I handled the issue in a professional manner,
My German boss never respected the profession. The supplier did though. I am a certified CPM and CPIM besides holding a master’s degree out of Loyola of Chicago. I was good at what I did in manufacturing and supply chain. Engineers have huge egos.
I ran a warehouse for Yazaki NA, The volume was ~$225 to $250 million a year. It turned somewhere in the teens yearly. We had a 93% delivery rate. Supply Chain, MRPII and ERP was my expertise in various industries including healthcare product (Baxter, etc.). This dinosaur is aging out.
Kaleberg, feel free to chat with me. You warrant a degree of respectwhich you may not be getting elsewhere. I know what you are talking about much of the time.