Tight Supply of EPR Leads to Rapid Capacity Expansion in China   

By Xiao Ming, Sinopec Yanshan Petrochemical Corp

Demand for EPR is vigorous but mainly depends on imports

Because ethylene-propylene rubber (EPR) features excellent resistance to ozone, aging, chemicals & steam, excellent electrical insulation properties and cheap and easily available monomers, it is widely used for automotive parts, waterproofing membranes, wire and cable sheathings, heat-resistant hoses, belts, car seals, lubricant additives and polyolefins modification. In recent years, with the rapid development of China's automobile and construction industries, the demand for EPR has increased significantly in the country. In 2010, the apparent consumption of EPR in China reached 234 000 tons, up 23.55% year on year. From 2005 to 2010, the average annual growth rate of China's EPR consumption reached 20.45%, and the country's level of dependence on EPR imports increased from 81.2% to 92.9% (see Table 1).
     
Table 1 Supply and demand of EPR in China     (thousand tons)
Year    Output    Imports    Exports    Apparent consumption    Dependence on imports /%                                                                                        
2005    19.2    75.0    1.9    92.3    81.2
2006    20.1    87.9    2.3    105.7    83.2
2007    20.1    114.7    5.0    129.8    88.4
2008    18.5    132.4    8.3    142.6    92.8
2009    17.7    174.6    2.9    189.4    92.2
2010    19.0    217.5    2.5    234.0    92.9


Analysis and forecast of market demand for EPR

In 2010, China's consumption structure of EPR was: the automotive industry accounted for about 44.87% of the national total demand for EPR, waterproofing membranes accounted for 9.40%, wires & cables 7.69%, oil additives 9.83%, polymer modification 11.97%, plastic tracks 9.83%, and others 6.41% (see Figure 1).
   The analysis and forecast of demand for EPR from various areas in China are as follows (see Table 2):

Table 2 Demand for EPR from various areas in China    (thousand tons)
Area    2010    2015(forecast)
Automotive industry    105    160
Waterproofing membranes    22    35
Oil additives    23    35
Wires and cables    18    25
Polymer modification    28    40
Plastic tracks    23    30
Others    15    25
Total    234    350

    (1) In the automotive industry, EPR is mainly used in automotive heat-resistant hoses, seal strips, rubber mats, spark plug jackets, white sidewalls of tires, and shields. EPR and polypropylene (PP) modifiers are used in the manufacture of auto steering wheels, bumpers, instrument panels, fenders, air ducts, fans, heat-dissipating grilles and a variety of pipes. In 2010, the demand for EPR in this area in China was about 105 000 tons. It is expected to reach about 160 000 tons in 2015.
    (2) In the area of waterproofing membranes, EPR is mainly used in houses, bridges, tunnels, reservoirs, dams and other waterproofing projects. Changshu Sanheng Building Materials Co Ltd, Shanghai Changning Rubber Products Factory, Beijing Carlisle Waterproofing Materials Co Ltd and Shanghai Tunnel Engineering Co Ltd have advanced large-scale EPR sheet production lines. Their products have been widely used in subways, Yellow River Diversion Project, the Three Gorges Project and the Olympic venues. Currently, China's annual demand for EPR-based waterproofing membranes exceeds 10 million square meters, but most of high-grade products in this area are imported from abroad. In 2010, the demand for EPR in this area in China was about 22 000 tons. It is expected to reach about 35 000 tons in 2015.
    (3) In the field of oil additives, EPR is one of major additives used to prepare multi-stage engine gear oil. In China, there are several oil tackifier plants, but many companies still import EPR-based viscosity modifiers to meet the domestic demand. In 2010, the demand for EPR in the field in China was about 23 000 tons. With increasingly stringent environmental regulations in China, it is expected to reach about 35 000 tons in 2015.
    (4) In the area of wires and cables, EPR is widely used in power cables, mining cables, wires and cables for military ships, X-ray DC voltage cables, and heat-resistant and high-voltage wires and cables for nuclear installations. In industrialized countries, EPR is also widely used in heat-resistant insulating sheathings of wires and cables in household appliances and office equipment. In addition, EPR is also used to fill conductive carbon black or other materials to obtain conductive or semi-conductive rubber. In 2010, the demand for EPR in this area in China was about 180 000 tons. It is expected to reach about 25 000 tons in 2015.
    (5) In the field of polymer modification, EPR and polyolefin can form a blend - EPDM/PP, which is a new material with great potential for development and is mainly used in automobile bumpers and instrument panels. In addition, EPR has good compatibility with many polymers and can be widely used as a polymer modifier and solvent. In 2010, the demand for EPR in this field in China was about 28 000 tons. It is expected to reach about 40 000 tons in 2015.
    (6) Plastic tracks. More than 80% of China's stadiums are now paved with polyurethane particles. In 2001, China started using EPR particles to pave stadiums, but most of the EPR particles are imported from abroad. Because EPR particles are easily produced and have no toxicity or pollution, this provides EPR particles a rare opportunity for extraordinary development. In 2010, the demand for EPR in this field in China was about 23 000 tons. It is expected to reach about 30 000 tons in 2015.
   Together with demands from other areas, China's total demand for EPR in 2015 will reach 350 000 tons. From 2010 to 2015, the annual growth rate of China's EPR consumption will reach about 8.4%.

Production and imports of EPR in China

In 1997, PetroChina Jilin Petrochemical Company introduced Japan Mitsui Chemicals' solution polymerization technology to build a 20 000 t/a EPR unit. In 2009, the company built a new 25 000 t/a EPR unit, but this unit has not been officially