Demand of SBR in China Increases,Product Quality Needs Improvement

By Chen Peng,  Sinopec Chemical Sales Co., Ltd. North China Branch

1. Capacity in Asia accounting for half of the global total

The capacity of styrene butadiene rubber (SBR) in the world was around 5.87 million t/a in 2011. In terms of regional distribution, the capacity of SBR in Asian countries and regions including China accounted for 49% of the world total in 2011. It is expected the capacity of SBR in the world to reach 6.50 million t/a by 2015. The Asian-Pacific region, North America and West Europe will still be the most important SBR production regions in the world.
The consumption of SBR in the world is expected to be 5.479 million tons in 2013. The demand in Asia would be 2.400 million tons in 2013, accounting for 43.8% of the world total. The demand in North America and West Europe will be respectively 1.019 million tons and 898 000 tons, accounting for 18.6% and 16.4%. The demand in Central and Eastern Europe will be 575 000 tons, taking up 10.5%. The Asian-Pacific region will remain to be the greatest growth potential region, growing 9.28% year on year in demand, Latin America will come next.

2. Consumption in China

In China today SBR is mainly used to produce tires, rubber shoes, rubber hoses/belts and cart tires. The consumption in tires and rubber shoes accounts for more than 70% of the total. With the promotion of the package stimulus plan implemented by the state, the demand of SBR in China starting from 2009 was more brisk than expected. Stimulus measures proposed by the Chinese Government one after another have boosted the demand of small-displacement and fuel-saving vehicles. The demand of tires and especially cheap low-end sedan tires produced by small and medium tire producers has increased. The rubber product sector in China has maintained a development trend. The stable production growth of various rubber products has driven a constant demand increase of SBR in China.

(1) Tires

The tire sector is the most important consumption sector of SBR in China. The consumption of SBR in tires accounts for around 54% of the total. In the tire sector, SBR is mainly used as tread rubber, sidewall rubber, carcass ply rubber, bead protective rubber, rubber core and steel wire sandwich rubber. Pushed by automobile consumption and export, the tire sector in China always maintained a rising trend from 2005. After the outbreak of the global economic crisis in 2008, owing to favorable factors such as economic stimulus measures taken by the state and the policy of automobiles going to rural areas, the output of tires in China represented a recovery from the negative growth and already reached more than 700 million pieces in 2010. The output growth of tires, however, slowed down during 2011-2012 mainly due to impacts from the economic slackness in the world, the demand downslide in the domestic market and the tire special protection case in the United States. Despite the constant capacity expansion conducted by tire producers the operating rate was low in Chinese market. The export market also made shrinkage. The output growth of tires was therefore slowed down.

(2) Rubber shoes

The rubber shoe sector is the second major consumption sector of SBR in China and the consumption accounts for around 15% of the total. Products mainly include cloth upper rubber shoes and full rubber shoes, with SBR1502 mostly used. Due to the antidumping tax imposed by foreign enterprises on China-made shoes and the sustained overall slackness of the domestic rubber market, the output of shoes in China made a further drop in 2010 compared with the output in 2009.
Judging from the consumption amount and the market volume, the consumption of shoes in China was nearly 2.0 billion pairs a year in recent years, exceeding the consumption in the United States (1.6 billion pairs) and holding the first place in the world. The rubber shoes making sector is an important consumption sector of synthetic rubbers. The total output of shoes in China was 9.5 billion pairs in 2005, consuming 520 800 tons of rubbers and the consumption of synthetic rubbers accounted for 56%. In the total output of shoes, the output of rubber shoes was 2.0 billion pairs, consuming 282 800 tons of rubbers and the consumption of synthetic rubbers accounted for 41.4%. The consumption proportion of SBR in the total rubber consumption is different with different types of shoes. The consumption proportion in sports shoes is the highest, reaching around 75%. The consumption proportion is around 70% in leather shoes and around 45% in cloth upper shoes. The consumption proportion is the lowest in rubber upper shoes, being around 25%. In addition to thermoplastic elastomers, the use of SSBR in rubber shoes also has many advantages.

(3) Rubber hoses/belts

The rubber hose/belt sector is the third major consumption sector of SBR in China. The development of the rubber hose/belt sector mainly relies on the development of coal, iron/steel, cement, power, port, mine, automobile, petroleum, textile, light industry and machinery sectors. The consumption of SBR in the rubber hose/belt sector accounts for around 11.2% of the total. Varieties used in rubber hose/belt producers are mainly SBR1500 and SBR1712. Due to the shortage of SBR resources in recent years, some producers have readjusted their recipes and increased the consumption proportion of cis-1,3-butadiene rubber (BR) and other synthetic materials.

(4) Automobile rubber products

SBR can also be used to produce automobile rubber products in China and the consumption accounts for around 5% of the total. Automobile rubber products usually refer to various rubber products except tires. They mainly include rubber tubes, transmission belts (V belts, synchronous belts), sealing parts (oil seals, sealing strips, ring gaskets), damping rubber parts and safety parts.
The development of the automobile industry has provided an extensive market space for the rubber product sector. Due to impacts from the global economic crisis on the automobile sector in 2008, however, both the output and the sales amount of automobiles made a reduction by different extents and the demand growth of SBR was also slowed down. The consumption of SBR in the automobile rubber product sector was around 42 000 tons in 2008 and picked up to 61 000 tons in 2011. In 51 major rubber product producers, the industrial total output value (at current price) in the first half of 2012 was 13.09% lower than the same period of the previous year, the sales revenue was 4.32% lower. The sales revenue of O seal rings was 38.4% lower and the sales revenue of damping parts was 41.66% lower. The export delivery value was 7.82% higher and the export ratio was 25.51%, being 4.97 percent higher.

(5) Cart tires

Cart tires mainly include bicycle tires, motorcycle tires and hand cart tires and the consumption of SBR accounts for 9% of the total. 70% of the cart tire output in China is concentrated in 25 enterprises with considerable scale such as Hangzhou Zhongce, Tianjin Wanda, Kenda Rubber (China) and Xiamen Zhengxin. The combined output of cart tires in China was around 1.669 billion pieces in 2011, growing 4.2% year on year during 2005-2010. The variety of SBR used in the cart tire sector is SBR1500. Colored bicycle tire casings mainly use SBR1502. Some motorcycle tire casings also use SBR1712 and small amounts of SSBR. Some enterprises also use small amounts of SBR1721.

3. Challenges in the SBR sector of China

Driven by related downstream sectors such as the automobile sector, the demand of SBR in China is on the increase and the capacity is also expanding. Nevertheless, the market share of China-made SBR is relatively small in the domestic SBR market. SBR produced in China has a great number of varieties, but the quality of many products is not high, the variety of products is not complete and the production technology is outdated.
The capacity of SBR in China is expected to increase in the next few years. The capacity growth in downstream tire, shoemaking and rubber product sectors will however be quite small. There is already market oversupply of SBR in China.
The major capacity of SBR in China today is in the production of general-purpose materials, with fierce competition. SBR producers need to develop some new products, readjust the product structure and produce special varieties with high added value. They should also cooperate with research units to develop special varieties downstream enterprises are willing to use or in urgent need to use and at the same time provide comprehensive technical support and good services to downstream processing companiers.