NBR Demand Grows Stably

By Wang Yuying

1. Sustained increase of output

The total capacity of NBR (acrylonitrile-butadiene rubber) in
the world increased from 546.5 thousand t/a in 2004 to 566.5
thousand t/a in 2005. Major NBR producers include Lanxess of
Germany, Zeon and JSR of Japan and Nitrilo Paratec Elastomers
of Mexico. The total capacity in these 4 producers accounts for
around 50% of the world total.
   There are 4 NBR units in China with a total capacity of 49.5
thousand t/a. Except the unit in CNPC Jilin Petrochemical
Company Ltd. that had failed to make production for 3 consecutive
years, the production in other 3 units was normal in 2005. The
total output grew considerably to 38.8 thousand tons, an
increase of 20.2% over 2004. The output in the two units in CNPC
Lanzhou Petrochemical Company Ltd. reached 25.3 thousand tons.
The import amount of NBR in China was 76.5 thousand tons in 2005,
an increase of 0.13% over 2004 and the apparent consumption was
112.9 thousand tons, an increase of 7.3%. To further increase
the market share and improve the industrial advantage, CNPC
Lanzhou Petrochemical Company Ltd. plans to construct a new 50
thousand t/a NBR unit in the next few years. The new unit will
use the technology developed by the company itself and product
varieties will also be different from present product varieties
such as N41 and N32. After the completion of the unit, the total
capacity of NBR in CNPC Lanzhou Petrochemical Company Ltd. will
be close to 70 thousand t/a. There is no capacity expansion in
2006 and CNPC Jilin Petrochemical Company Ltd. has no plan for
production restoration either. The output of NBR in China will
therefore have no big growth in 2006.
   Nearly 50% of NBR in China is used to produce car components.
It also has applications in electric wires/cables, adhesives,
oil-resistant printing boards, printing rollers and cases. NBR
can be blended with other materials into modified elastomers.
Such blends have extensive applications in products with
requirements on resistance to oil, ozone and corrosion. With the
rapid development of the automobile industry and application
sectors such as electric wires/cables, the consumption of NBR
in China will hopefully reach more than 120 thousand tons in
2006.

2. High level of price

The price of NBR has always presented a rising trend since 2000.
It increased from less than RMB7 000 per ton in 2000 to more than
RMB14 000 per ton in 2003. The price reached more than RMB20 000
per ton in 2004. It remained at a high level in 2005 with a yearly
average price of RMB22 142 per ton and the highest price of RMB25
500 per ton appeared in September 2005. Major reasons for the
price rise of NBR include the sustained price rise of raw
materials butadiene and acrylonitrile and the high price level
of NBR in the international market. The price of NBR has reduced
slightly in 2006. It was around RMB23 500 per ton from January
to May and dropped to RMB21 900 per ton in September, being RMB3
600 per ton lower than the same period of 2005. Despite a recent
slight price drop, the firm price of butadiene and acrylonitrile
and the smooth sales channel in downstream sectors offer support
to the price of NBR. It is expected that the price of NBR will
maintain at a high level for a considerable period of time in
future, but the growth margin will not be very large.

3. Growth slowdown of import

Although the output of NBR in China increased considerably in
2005, the import amount still reached 76.5 thousand tons,
accounting for around 68% of the apparent consumption. Major
import sources include Russia, Japan, Korea, France and Taiwan
province. NBR imported from Russia was mostly in primary form
and the import amount in 2005 was around 24.3 thousand tons,
accounting for 31.8% of the total. The amount imported from Japan
was around 18.2 thousand tons, accounting for 23.8%.
   The growth in the import amount of NBR is having a gradual
slowdown. The import amount in 2005 was basically equal to 2004.
Besides, the technology and product brands in the 20 thousand
t/a NBR unit located in Zhenjiang Nantex Chemical Co., Ltd. are
identical to those in Nantex Industry Co., Ltd. of Taiwan
province. The normal production of the unit will ease the supply
deficit of NBR in the domestic market. It is therefore expected
that the import amount of NBR will not grow drastically in 2006.

NBR Producers in China in 2005
(thousand t/a)
Producer    Capacity
CNPC Jilin Petrochemical Co.    10.0
CNPC Lanzhou Petrochemical Co.    19.5
Zhenjiang Nantex Chemical Co.    20.0
Total    49.5
Source: CNCIC Chemdata