Vigorous Demand for EPDM Drives Rapid Capacity Growth in China   

By Li Zejiang, Research Institute of Industrial Economics of CNCIC

Capacity will grow fast in coming years

In 2010, China's EPDM rubber (ethylene propylene diene monomer) capacity was 20 000 t/a, its output was 20 000 tons, up 13.2% year on year, and the capacity utilization rate was 100%. In China, there is now only one EPDM producer, that is, PetroChina Jilin Petrochemical Company, which imported a solution polymerization facility from Japan's Mitsui Chemicals. This facility could produce 20 types of EPDM products.  However, most of the products could not meet domestic market needs. Now, only two types are retained: 3062E and 4045. On the basis of the imported facility, Jilin Petrochemical independently developed new types of EPDM products, such as J-2070, J-3080 (P) J-3092E, J-0010, J-0030, J-0050 and J-0080.
   EPDM has many excellent performances and a wide range of uses that other types of general-purpose synthetic rubber do not have, but there is only one EPDM producer in China, having a limited capacity, so its supply is far from meeting the domestic demand (see Table 1). Thus, many Chinese companies plan to build new or expansion EPDM units. Jilin Petrochemical is now building a 50 000 t/a EPDM unit. The first 25 000 t/a production line of the unit was successfully put into operation in August 2011 in Jilin City, Jilin Province. In addition, there are a few other EPDM projects that are under construction or will be built (see Table 2). China's EPDM capacity and output will increase rapidly in coming years. It is expected that in 2015, the capacity will reach 245 000 t/a, and the output will be 200 000 tons; and in 2020, the capacity will reach 480 000 t/a, and the output will be 380 000 tons.
Table 1  Supply and demand of EPDM in China from 2005 to 2020 and their projections
Year    Capacity(kt/a)    Output(kt)    Import(kt)    Export(kt)    Apparent consumption(kt)    Operating rate(%)    Gap*(kt)
                                                                                                                                                  
2005    20    20    75    1.9    93    100    73
2006    20    20    88    2    106    100    86
2007    20    20    115    5    130    100    110
2008    20    19    132    8    143    95    124
2009    20    18    175    3    190    90    172
2010    20    20    218    2.5    235.5    100    215.5
2011E    45    30    223    1.8    251.2    66.7    221.2
2015E    245    200    229    2    427    89.8    207
2020E    480    380    183    8    565    90.9    65
Note: gap = apparent consumption - output

Table 2  List of new and proposed EPDM projects in China
No    Producer    Capacity(kt/a)    Location    Start time    Finish time    Production process    Remarks
1    PetroChina Jilin Petrochemical Company     50    Jilin city, Jilin province    2007    2013    Italy FasTech solution     polymerization technology    The first-phase 20 000 t/a unit was put into operation in August 2011
2    Shandong Yuhuang Chemical Co Ltd     50    Shandong province    2012    2013    Domestic technology, and Italy FasTech solution polymerization technology    Currently in EIA phase
3    Shanghai Sinopec Mitsui Chemicals Co Ltd     75    Shanghai    2012    2013    Mitsui metallocene solution    polymerization technology    Ethylene and propylene will be supplied by SECCO Petrochemical, and diene will be purchased from the market
                         
Downstream demand is vigorous

In China, EPDM is mainly used for the production of automobile parts, waterproofing membranes, wires and cables, oil modifiers and polymer modifiers (see Table 3). In 2010, China's apparent consumption of EPDM was about 235 500 tons, 92.6% of which was imports. The following will analyze the consumption of EPDM in various areas in China.

1. Auto parts

In China's auto industry, EPDM is mainly used for the production of heat resistant hoses, sealing tapes, rubber mats, spark plug jackets, white sidewall tires and protective enclosures for automobiles. EPDM and polypropylene modified materials are used for the manufacture of steering wheels, bumpers, instrument panels, fenders, air ducts, fans, radiator grilles and a variety of pipes and fittings for automobiles. In 2010, the consumption of EPDM in China's auto sector reached 100 000 tons. It is expected that in 2015, the demand for EPDM in the sector will reach about 175 000 tons, having an average annual growth rate of 11.8%; and in 2020, it will reach 240 000 tons. The auto sector is one of the fastest growing consumer areas of EPDM.

2. Waterproofing membranes

EPDM is one of best waterproofing membrane materials. Compared with conventional asphalt, EPDM has a long use life, large strength, good flexibility, reliable waterproof performance, convenient construction and small risks, so it has been widely used for the waterproof