The price of polyamide is generally traded reflecting its manufacturing cost, but in Japan there are unique business practices that affect its pricing. One of these business practices is to link the price of polyamide to the price of naphtha, which is the base material.

The naphtha price was originally used to price polyolefins, and although it was reasonable to use as the basis of pricing polyolefin, it was diverted to polyamide in the early 1990s. Now it is widely used in domestic transactions. This method is now disconcerting material makers.

For example, caprolactam - a raw material of PA6 - is produced by repeating a chemical reaction using benzene extracted from naphtha as a starting material. Originally the price of naphtha as a base material and the price of caprolactam derived from it should be linked, but now there is a deviation between the price of both. Simply put, while the price of naphtha has decreased, the price of caprolactam has increased.

Naphtha's price decline is influenced by the fact that ethylene is not made from naphtha, but made from inexpensive ethane gas. The price of naphtha decreased because of competition with ethane gas. On the other hand, the production of caprolactam has decreased as the regulations on emission gas and wastewater from plants are strengthened in China—the country is the largest supplier of caprolactam. For this reason, even though the price of naphtha has declined, the price of caprolactam has risen.

In this case, the price of PA 6 is in conjunction with the raw material caprolactam, not the base material naphtha. However, in Japan, the pricing linked to naphtha is a custom; therefore, only the material makers are burdened with the increased manufacturing cost.

The potential negative impact of this pricing practice is the possible delay of plasticization in the Japanese automobile industry. Due to stricter regulations on CO2 emissions and progress of electric vehicles, plasticization of automotive parts by European and American automakers are expected to develop further.

On the other hand, in Japan, there is a potential risk that transactions between the material suppliers and automakers will be narrowed because the pricing method is  inconsistent with market principle. Therefore, to maintain the international competitiveness of the leading industries in Japan, the introduction of a pricing method based on market principle is awaited.