Competition for Future Market of Butyl and Halogenated Butyl Rubber Sector   

By Xiao Ming, CNCIC

Several plants will be launched recently

In 2010, the total production capacity and output of butyl rubber (or isobutylene-isoprene rubber, IIR) and halogenated butyl rubber (HIIR) in China was about 127 000 t/a and 42 000 tons, respectively. The capacity of major IIR producers in China is listed in Table 1.
                                              
Table 1 Capacity of major IIR and HIIR producers in China in 2010                                     (thousand t/a)
Company    Capacity    Remarks
Sinopec Yanshan Petrochemical Company    75    30 000 t/a in 1999, expanded to 45 000 t/a in 2008. A 30 000 t/a brominated butyl rubber unit was completed in Oct. 2010
Nantong Dongteng Special Synthetic Rubber Co Ltd    0.5    A chlorinated butyl rubber unit, completed in 2008
Zhuhai Aosheng Polymer Materials Ltd    thousand tons    A chlorinated butyl rubber unit, completed in 2009
Zhejiang Xinhui New Synthetic Materials Ltd    50    put into operation in September 2010
Zhejiang Longsheng Group Co Ltd    1    A brominated butyl rubber unit, completed in November 2010

   In recent years, due to the development of tire and auto industries, especially the rapid development of radial tires, the demand for IIR and HIIR in China has been increasing every year, and IIR and HIIR prices have been hovering at high levels, and investment returns are good. Therefore, many enterprises prepare to build or expand IIR and HIIR production facilities (see Table 2).
                                             
Table 2  IIR and HIIR units planned or expanded in China                          (thousand t/a)
Company    Capacity    Expected completion time    Remarks
Sinopec Yanshan Petrochemical Company    90    2012    Containing the brominated butyl rubber project
Panjin Zhenao Chemical Ltd    100    2011(phase I  60 000 t/a)    Producing general IIR and HIIR
CNOOC    50    N. A.    LNG technology
Tianjin Lugang Petroleum Rubber Co., Ltd.    60    N. A.    N. A.
PetroChina Daqing Petrochemical Company    60    N. A.    N. A.
Formosa Plastics Synthetic Rubber Industry (Hong Kong) Limited    50    N.A.    Formosa Industrial Park, Beilun, Ningbo
Zhejiang Longsheng Group    3    N. A.    Brominated butyl rubber

   It is expected that by 2015, China will have a total IIR and HIIR capacity of more than 300 000 t/a and become one of the world's major IIR and HIIR producers.
   
Consumption is growing
With the development of China's auto and tire industries, in recent years China's apparent consumption of IIR and HIIR has been increasing. In 2003, the apparent consumption of IIR and HIIT in China was only 100 500 tons. In 2010, it grew to 281 500 tons. During 2005 - 2010, its average annual growth rate reached about 12.73%. But the self-sufficiency rate of the products dropped from 26.9% in 2003 to 14.92% in 2010, indicating that China's IIR and HIIR market still mainly relies on imports and thus has very good market prospects (see Table 3).
                                            
Table 3  Supply and demand of IIR and HIIR in China                          (thousand tons, %)
Year    Output    Imports    Exports    Apparent consumption    YOY growth    Self-sufficiency rate
2003    27    83.5    10    100.5    50.2    26.9
2004    37.6    98.8    11    125.4    24.8    30
2005    39    125.6    10    154.6    23.3    25.2
2006    39.8    170.9    4.2    206.5    33.6    19.3
2007    39    182.2    1.7    219.5    6.3    17.8
2008    44    189.1    2.3    230.8    5.28    19.1
2009    40.3    224.5    6.6    258.2    11.87    15.61
2010    42    249.2    9.7    281.5    9.02    14.92

   In 2010, the total consumption of IIR and HIIR in China was about 282 000 tons (including HIIR 170 000 tons), of which consumption in tires accounted for 84.4%, medical stoppers 10.6%, and other areas about 5.0% (see Table 4).
                      
Table 4  Consumption of IIR and HIIR in China and forecasts in the future              ( thousand tons, %)
                                                  
Consumption structure    2004 Consumption    Proportion    2010 Consumption    Proportion     2015 (forecast) Consumption    &n