Review and Outlook of China's Rubber Assistants Market   

By Liang Cheng, Sinopec Nanjing Chemical Corp

The rapid development of China's automotive, rubber and tire industries in recent years has boosted the fast growth of the country's rubber assistants industry. Now, China becomes the world's largest producers of autos and tires, and it also is the world's largest producer and consumer of rubber assistants.

1. Review in 2010

In 2009 -2010, the output of rubber assistants in China grew rapidly. In 2009, it was about 595 000 tons. The output of rubber assistants in 2010 was expected to reach 666 000 - 672 000 tons, up 12-13% year on year. Because of overcapacity and increasingly fierce market competition, prices of most rubber assistants ran at low levels. In 2010, profits of rubber assistants producers had a significant decline compared to previous years, and almost all the products entered a low-profit stage, and some small and medium-sized manufacturers inclined to losses.

1.1 Price movements

Prices of rubber assistants are subject to multiple factors. Price movements of different rubber assistants are different, and their factors are different, too.

    1) For p-phenylene diamine family rubber antioxidants 4020 and 4010NA, due to their too fast capacity expansion and high prices of their basic raw material - aniline, although they had certain profit margins, their profit margins were being squeezed, and their prices continued to decline. In 2010, prices of antioxidants 4020 and 4010NA in China always stayed below RMB30 000 /t. In the end of 2010, their prices remained at RMB27 000 /t and RMB26 500 /t, respectively, down about 10% year on year (aniline prices were basically flat with or slightly lower than the same period of 2009).
    2)  Prices of antioxidant RD basically fluctuated at RMB15 000 /t. In the end of 2010, the ex-factory price of antioxidant RD was about RMB15 000 /t, up 10% year on year. The price of antioxidant 3100 basically remained at about RMB40 000 /t, because the price of hydroquinone, one of its main raw materials, continued running high, stably staying at RMB70 000 /t. Because the prices of their raw materials, aniline and o-phenylenediamin, ran high, prices of diphenylamine-based antioxidants and antioxidant MB in 2010 were also 5-10% higher than in the same period of 2009. Although the prices of the antioxidants went up, their profit margins were not ideal, because their price hikes were mainly caused by rising raw materials prices.
    3) For accelerator M, due to its rapid capacity expansion in recent two years, despite the high price of aniline, its prices did not climb much. In the end of 2010, its ex-factory prices basically stayed at RMB14 000 - 15 000 /t, flat with that in the same period of 2009. But the price of raw material aniline rose compared to 2009, the originally meager profit margins of Accelerator M were further squeezed. Accelerator DM basically had the same price movement with accelerator M.
    4) Prices of sulphenamide-type accelerators were basically stable throughout 2010. Due to high prices of raw materials such as morpholine, cyclohexylamine and tert-butylamine, prices of accelerators NOBS, CBS, and NS were slightly higher than the same period of 2009. As the price of their major raw material - accelerator M - almost did not rise, their profit margins were good, basically flat with those in 2009.
   Overall, in 2010 rubber assistants prices in China were relatively stable. With capacity expansion and improved supporting facilities, rubber assistants producers have constantly increased their market risk-resisting ability and can keep the prices of their products stable despite violent fluctuations of raw materials prices.

1.2  Imports and exports

With the recovery of the global economy, the exports of rubber assistants in China increased fast in 2010. In particular, the exports of rubber accelerators increased significantly. According to customs statistics, in the first 11 months of 2010, China's total export volume of rubber antioxidants and accelerators reached 70 346 tons, increasing by 39 047 tons from the same period of 2009, up 80.2% year on year. Imports and exports of rubber assistants in China in the first 11 months of 2010 are listed in Table 1 and Table 2

Table 1  Imports and exports of rubber antioxidants in China in the first 11 months of 2010   (tons, US$)
Month             Export volume      Export value        Import volume     Import value
1    755    1503606    1401    4804277
2    605    1255283    1044    3733386
3    692    1463246    1418    4968805
4    672    137453    1512    5406449
5    782    1669493    1275    4749411
6    477    1061864    946    3487183
7    842    1838508    1665    1014895
8    518    1199702    1015    3456372
9    899    1995231    1223    4363351
10    462    1063555    507    1878950
11    650    1505650    1247    4089999
Total    7354    15930670    13253    46455590

Table 2  Imports and exports of rubber accelerators in China in the first 11 months of 2010   (tons, US$)
Month    Export volume         Export value       Import volume        Import value
1    4437    11523431    1547    5672718
2    3956    10399328    1017    4367384
3    5714    15102439    1671    7420282
4    4888    13529854    1473    7420282
5    6965    18935665    1639    6791472
6    6566    18143049    1450    8041213
7    6953    20629035    1200    6716167
8    5778    16515345    1460    6667636
9    5934    17922282    1314    6382169
10    5723    16420582    1241    5494303
11