Butyl Rubber Sector Holds Promise but Needs Much More Development

By Xiao Ming

Capacity continues to increase

In 1999, Sinopec Beijing Yanshan Petrochemical Company introduced technology from Italy PI company and built a 30 kt/a production device. In 2008, the capacity of this device was expanded to 45 kt/a. A bromine butyl rubber production device was built in 2010. In September 2014, Yanshan Petrochemical Company built another butyl rubber production unit, this time with a capacity of 90 kt/a, bringing the firm’s total butyl rubber capacity to 135 kt/a. At present, Yanshan Petrochemical Company can produce common butyl rubber and brominated butyl rubber.
In September 2010, Zhejiang Cenway New Synthetic Materials Co., Ltd. completed and put into production a 50 kt/a butyl rubber device in Jiaxing city, in cooperation with Tsinghua University. The capacity was expanded to 65 kt/a in 2012, with the products of common butyl rubber, chlorinated butyl rubber and brominated butyl rubber.
In August 2013, Liaoning Panjin Heyun Industrial Group Zhenao Chemical Corporation employed Russian YARSINTEZ technology to build a new 60 kt/a butyl rubber production plant and put it into operation.
In addition, Jiangsu Nantong Dongteng Special Rubber Corporation, Zhuhai Aosheng Polymer Materials Corporation and Zhejiang Longsheng Group built a thousand-ton class chlorinated butyl rubber and brominated butyl rubber pilot device.
By the end of 2014, China’s butyl rubber capacity had reached 260 kt/a. Sinopec Beijing Yanshan Petrochemical Company is the largest producer, holding 51.9% of the nation’s capacity.


Table 1    New and expanded butyl rubber units, 2015 ~ 2019

Company    Location    Capacity (kt/a)    Remark
Liaoning Panjin Zhenao Chemical Co., Ltd.    Liaoning Panjin    60    Halogenated butyl rubber; planned for operation in 2015
Shandong Shenchi Chemical Co., Ltd.    Shandong Dongying    60    Common butyl rubber and halogenated butyl rubber
Shandong Chambroad Petrochemicals Co., Ltd.    Shandong Binzhou    50    Common butyl rubber and halogenated butyl rubber; planned for operation in 2015
Formosa Plastics Synthetic Rubber Industry (Ningbo) Co., Ltd.    Zhejiang Ningbo    100    50 000 t/a common butyl rubber is planned for operation in 2015; 50 000 t/a halogenated butyl rubber unit is planned for operation in 2016
China Eastar Group    Shandong Dongying    50    Common butyl rubber and halogenated butyl rubber; planned for operation in 2015
CNOOC Energy Technology & Services Limited, Huizhou Branch     Fujian Putian     50    Using LNG cold energy to produce butyl rubber; plans to be put into operation in 2016
Lanzhou GPRO Petrochemical Co., Ltd.    Xigu district, Lanzhou    60    Common butyl rubber; planned for operation in 2016
Tianjin Lugang Petroleum Rubber Co., Ltd.    Tianjin    60    Common butyl rubber; planned for operation in 2017
Total        490    




In recent years, due to the vigorous development of the tire industry downstream, especially the production of radial tires, and the encouragement of national policy, many enterprises, such as Liaoning Panjin Zhenao Chemical Corporation, CNOOC Energy Technology & Services Limited and Shandong Shenchi Chemical Corporation, etc., are planning to build or expand capacity. If all these plans are carried through, China’s butyl rubber capacity will exceed 700 kt/a by 2019. However, because of lean business for producers of synthetic rubber and the tire industry downstream in the last two years, some butyl rubber development projects have been delayed. China’s new and expansion butyl rubber units are listed in Table 1.

Import volume keeps growing

At present, the capacity and output of butyl rubber cannot meet the market demand. Each year, more needs to be imported from abroad. China imported only 182.2 kt of butyl rubber in 2007; the volume increased to 249.2 kt in 2010, and 268.9 kt in 2014 (up 6.79% YOY).
Due to the rapid growth of demand for China's high performance radial tires, medical rubber plugs and other products, the halogenated butyl rubber import volume increases year by year. In 2014, 204.4 kt of halogenated butyl rubber was imported, increasing 3.97% YOY and amounting to 76.01% of all butyl rubber imports.
China exported less butyl rubber, with the export volume of 11.4 kt in 2014, down 27.39%. See Table 2.
China imports butyl rubber mainly from the United States, Belgium, Singapore and Russia. In 2014, the imports from these four countries reached 196.4 kt, accounting for about 73.04% of total imports, and up 29.81% YoY. Among these, the United States is China's most important source of butyl rubber imports, providing about 25.92% of the total. See Table 3.
In recent years, the import volumes from the United States, Russia and Belgium have not changed much, in contrast with the volumes from Singapore and Canada. The import from Canada fell by a large margin. Before 2012, China imported no butyl rubber from Singapore. Since the LANXESS butyl rubber plant in Singapore was completed and put into production, its products started to be exported to China, increasing 375% from 400 tons in 2012 to 41.8 kt in 2014. The main reasons for such big increase include the zero tax from Singapore to China and the close proximity and concomitant low transportation cost. It is expected that the volume imported from Singapore will go on increasing, but gradually.

Table 2  China’s import & export of butyl rubber and halogenated butyl rubber (kt)

Year    Butyl rubber    Halogenated butyl rubber    In total    
    Import    Export    Import    Export    Import    Export
2007    59.2    1.2    123    0.5    182.2    1.7
2008    62.9    1.7    126.2    0.6    189.1    2.3
2009    68.0    5.7    156.5    0.9    224.5    6.6
2010    79.0    8.6    170.2    1.1    249.2    9.7
2011    67.0    17.5    168.4    0.8    235.4    18.3
2012    46.0    21.8    184.6    0.8    230.6    22.6
2013    55.2    15.0    196.6    0.7    251.8    15.7
2014    64.5    10.1    204.4    1.3    268.9    11.4

Table 3    Principal sources of butyl rubber imported to China  (kt)

Year    2011    2012    2013    2014
Russia    43.0    40.5    39.4    44.6
France    8.3    3.4    6.9    7.7
Japan    20.4    23.1    31.4    24.2
U.S.    71.6    77.3    65.2    69.7
Canada    41.9    33.8    54.6    30.3
Belgium    35.5    42.0    37.9    40.4
U.K.    12.1    8.3    5.9    6.6
Singapore    0    0    8.8    41.8
Others    2.6    2.2    1.7    3.6
Total    235.4    230.6    251.8    268.9



Consumption increases steadily

In recent years, the apparent consumption of butyl rubber in China has been increasing. China’s apparent consumption of butyl rubber was 219.5 kt in 2007, 281.5 kt in 2010 and 367.5 kt in 2014, increasing 11.0% annually. From 2009 to 2014, the average annual growth rate of apparent consumption was about 7.31%. Product self-sufficiency was 17.77% in 2007, 14.92% in 2010, and 29.93% in 2014. China’s butyl rubber products still have good prospects for development. China’s supply and demand for butyl rubber in recent years is shown in Figure 1.
At present, the consumption structure of butyl rubber in China is as below: tire manufacture accounts for about 84.5% of total consumption, while making pharmaceutical stoppers accounts for 10.5%. The most common butyl rubber grades used in China are IIR1751, 532, 552, 572, 632, 652 and 1650, and imports of 268, 301, BK1675N; the main halogenated butyl rubber products are LANXESS 2030 and X2, ExxonMobil Chemical 2211, 222, 2235, 2244, 2255, 1065, 1068, and Russia's CBK150, CBK139, BBK232, BBK239.
The speed-up of development in the radial tire industry, in the pharmaceutical industry and in the urbanization process will promote butyl rubber demand, which is expected to reach 450~500 kt in 2019. Within this, the demand for halogenated butyl rubber will reach 360~400 kt, and the automotive sector will continue to be the main area of consumption. The consumption of common butyl rubber will gradually decline, while demand for halogenated butyl rubber will grow steadily.

Market prices continue to fall

The price of Chinese butyl rubber is mainly affected by prices of raw material isobutene and by demand. In the last two years, domestic market prices of butyl rubber declined. The price was RMB23 500/t in January 2014, and down to RMB19 800/t in May. It rose a bit after June and then slid to the year’s low of RMB19 700/t in December. In 2015, the price has continued to decline. It was RMB17 500/t in January, RMB17 000/t in February. The prices of foreign butyl rubber are also declining, but more slowly.