Changes in Natural Rubber Import

By Yan Feng

With the sustained and rapid development of the national economy, the amount of natural rubber imported by China has grown steadily in recent years. According to customs statistics, the total was 2 611.4 kt in 2014, an increase of around 5.56% over the previous year. The amount of natural latex imported was 366 kt, accounting for 14.01% of the total and an increase of around 9.06% over the previous year. The import volume of technically specified natural rubber (TSNR) was 1 916.2 kt, accounting for around 73.38% of the total and an increase of 6.77% over the previous year. The import volume of rubber smoked sheet (RSS) was 311.8 kt, accounting for around 11.94% of the total and a drop of around 4.41% from the previous year. The amount of other varieties imported in primary form was 17.4 kt, accounting for around 0.67% of the total and an increase of around 0.58% over the previous year. The amount of gutta-balate and analog natural rubber imported was 33.57 tons, a drop of around 45.55% from the previous year.

1. Imported natural rubber comes mainly from Thailand and Malaysia

Natural rubber is imported to China mainly from prominent rubber producing countries such as Thailand, Malaysia, Vietnam and Indonesia. These four countries sold China 2 486.1 kt in 2014, amounting to 95.20% of the total and an increase of around 5.57% over the previous year. See Table 1 for details.
Thailand is the biggest source, providing 1 626.7 kt in 2014, around 62.29% of the total and an increase of around 13.21% over the previous year. Thailand is also the biggest source of natural latex, TSNR and RSS in China. The amount of natural latex imported from Thailand was 338.3 kt in 2014, accounting for 92.43% of the natural latex total and an increase of around 7.67% over the previous year.
Indonesia is the second major source, shipping 362 kt to China in 2014, accounting for around 13.86% of the total and a drop of around 13.15% from the previous year. Malaysia is third, sending 310.1 kt in 2014, accounting for around 11.87% of the total and a decline of around 3.0% from the previous year. Vietnam is fourth. The amount from Vietnam in 2014 was 187.3 kt, accounting for around 7.17% of the total and an increase of around 3.25% over the previous year. Vietnam is also the biggest source of other varieties in primary form, sending 10.9 kt in 2014, accounting for around 62.64% of the total import amount of other varieties in primary form and an increase of around 4.81% over the previous year.

Table 1    Major import sources of natural rubber varieties, 2014

Variety    Thailand    Indonesia     Malaysia    Vietnam
    Import
volume (kt)    YoY (%)    Import
volume (kt)    YoY
(%)    Import
volume (kt)    YoY (%)    Import
volume (kt)    YoY (%)
Natural latex    338.3    7.67    0.3    -    12.4    5.08    11.2    -
TSNR    1 037.4    21.73    354.9    -13.31    293    -    154.5    -
RSS    248.0    -7.05    6.5    -    4.2    -    10.7    -
Other varieties in primary form    3.0    18.92    0.3    -    0.5    -    10.9    4.81
Total     1 626.7    13.21    362.0    -13.15    310.1    -3.0    187.3    3.25



2. Major import regions

Most of the natural rubber imported by China goes to tire producing areas such as Shandong, Zhejiang, Guangdong, Shanghai, Jiangsu and Fujian. The amount imported by these 6 regions was 1 973.9 kt in 2014, accounting for around 75.59% of the total and a drop of around 0.04% from the previous year.
Among them, Shandong imports the most, taking 1 288.1 kt in 2014, around 49.33% of the total and an increase of around 2.30% over the previous year. Shandong also imports the most TSNR and RSS, absorbing 1 197.7 kt in 2014, accounting for around 62.50% of the imported TSNR and an increase of around 2.53% over the previous year. The amount of RSS imported by the region was 59.6 kt in 2014, accounting for around 19.11% of the total and a fall of around 6.29%.
Zhejiang is second, importing 168.6 kt of natural rubber in 2014, around 6.46% of the national total and a drop of around 2.66% from the previous year. Jiangsu is third. The region imported 152.3 kt in 2014, accounting for around 5.83% of the total and an increase of around 8.24% over the previous year.

3. Major import trade mode

Natural rubber is imported to China mainly in three modes: processing by imported materials, general trade and bonded warehouse transit goods. The amount imported in these modes was 2 488.9 kt in 2014, accounting for around 95.31% of the total and an increase of around 4.71% over the previous year. See Table 2 for details.
The most common of the three is “processing by imported materials”. The amount imported this way in 2014 was 1 283 kt, accounting for around 49.13% of the total and an increase of around 2.21% over the previous year. “General trade” is second. The amount imported in the form was 655.4 kt in 2014, accounting for around 25.10% of the total and an increase of around 5.93% over the previous year.

Table 2    Import modes for natural rubber in China, 2014 (kt)


Mode    Natural
latex    TSNR    RSS    Other varieties in primary form    Total
General trade    304.3    170.1    178.9    2.1    655.4
Processing/assembling by supplied materials    5.6    1.1    0.5    1.8    9.0
Processing by imported materials    53.0    1 160.1    59.3    10.6    1 283.0
Small-volume border trade    1.3    20.6    21.5    0.3    43.7
Bonded warehouse entry/exit goods    0.7    66.5    0.8    1.0    69.0
Bonded warehouse transit goods    1.0    497.2    50.7    1.6    550.5
Others    0.1    0.6    0.1    0    0.8
Total    366.0    1 916.2    311.8    17.4    2 611.4


4. Import price is declining

China’s average import prices for natural rubber varieties all fell sharply in 2014. The average price of imported natural latex was US$1 479.41/t, a drop of around 21.62% from the previous year. The average import price of TSNR was US$1 922.08/t, a drop of around 27.87% from the previous year. The average import price of RSS was US$2 202.86/t, a drop of around 22.99% from the previous year. The average import price of other varieties in primary form was US$2 408.68/t, a drop of around 11.73% from the previous year.

5. Future development

The tire sector is the most important sector in China for the consumption of natural rubber. In recent years, the operating rate of the tire sector in China is down, product inventories are high, the profit rate has dropped precipitously and oversupply has become more serious. The demand for natural rubber in making tires and in other sectors has therefore fallen. The import of natural rubber as raw material will surely be affected.
The prices of natural rubber in the international market have dropped persistently in recent years, so major rubber producing countries have reduced production and propped up prices. They have cut down the export of natural rubber. The import of natural rubber by China will of course be affected to a certain extent.
Starting from January 1, 2015, China’s temporary import tariff rate on natural rubber was adjusted from 20% or RMB1 200/t to 20% or RMB1 500/t, an increase of RMB300/t. The temporary import tariff on natural latex was adjusted from 10% or RMB720/t to 10% or RMB900/t, an increase of RMB180/t. Since enterprises using natural rubber, such as tire producers, tend to import it in the form of processing trade, the relative popularity of import trade modes will be affected.
With the completion of a great many new synthetic rubber units and expansions in recent years, the capacity to make synthetic rubbers and especially large-volume varieties such as SBR and BR has already been in surplus. As synthetic rubber is abundant and low in price, enterprises will, in some cases, substitute it for natural rubber, directly reducing the demand for imported natural rubber.
For some time to come, China will still import quite a big amount of natural rubber. High import tariffs, slack demand, troubled export of rubber goods, implementation of new standards for compound rubber and drastic growth of synthetic rubber capacity will, however, all affect the future import of natural rubber.