Sufficient Supply of EPR in China

By Zhou Hexiang


In China, EPR (ethylene-propylene rubber) is used mainly in making automobile components, waterproofing materials, electric wires/cables, oil product modifiers and polyolefin modifiers. The manufacture of automobile components consumes 44.9%, around 12.0% is used for polymer modification, around 9.4% for construction materials, around 7.7% for electric wires/cables, around 9.8% for petroleum additives, and around 9.8% for plastic floormats.
With the rapid development of the automotive and construction sectors in China in recent years, the demand for EPR has increased dramatically. The apparent consumption of EPR in China was 92.3 kt in 2005, increased to 234.3 kt in 2010 and reached 324.8 kt in 2014, an increase of around 19.76% from 2013. The average annual growth of the apparent consumption was 11.39% during 2009-2014. However, China’s EPR self-sufficiency has declined constantly from 19.02% in 2006 to 8.24% in 2010, but then it picked up a little to 8.65% in 2014. It is expected that domestic demand for EPR will reach 450 kt in 2019. Auto manufacture and polymer modification will remain the two biggest consumption sectors.
According to customs statistics, China imported 114.7 kt of EPR in 2007 and 223.1 kt in 2011, an increase of around 2.57% over 2010. The import volume was 301.1 kt in 2014, an increase of around 19.34% over the previous year. While importing EPR, China also has exported small quantities, sending out 5.0 kt in 2007 and 2.1 kt in 2011, a drop of around 16.0% from 2010. The export volume was 4.4 kt in 2014, an increase of around 41.93% over the previous year. The export volume was 2.2 kt during January-September 2015, a drop of around 33.33% from the same period of the previous year.

Capacity expansion driven by drastic domestic & foreign investment

A 40 kt/a EPR unit constructed by PetroChina Jilin Petrochemical Co., Ltd. with its own proprietary technology and a 75 kt/a EPR unit constructed by Sinopec Mitsui Elastomers Co., Ltd. were completed and put on stream in 2014. The latter firm is a joint venture of Sinopec and Mitsui Chemicals of Japan, set up on a 50:50 basis. The unit takes ethylene, propylene, ENB (ethylidene norbornylene) and VNB (5-vinyl-2-norbornylene) as major monomers and uses advanced metallocene catalyst solution-process polymerization technology from Mitsui Chemicals of Japan.

Table 1   EPR units planned to be constructed or expanded in China, 2015-2019

Producer    Location    Capacity (kt/a)    Expected time for startup
Shandong Dongying Tianhong Chemical Co., Ltd.    Dongying, Shandong    90    Under construction
Shandong Yuhuang Chemical (Group) Co., Ltd.    Heze, Shandong    50    Pigeonholed
Yanchang Yan’an Energy and Chemical Group Co., Ltd.    Yan’an, Shaanxi    50    Under construction
LANXESS (Changzhou) Chemical Co., Ltd.    Changzhou, Jiangsu    160    2015 (production already started)
Ningbo SK Synthetic Rubber Co., Ltd.    Ningbo, Zhejiang    50    2015 (production already started)
Liaoning North Dynasol Synthetic Rubber Co., Ltd.    Panjin, Liaoning    100    2017
Sinopec Beijing Yanshan Petrochemical Co., Ltd.    Fangshan, Beijing    40    Pigeonholed
Chongqing Changshou Chemical Co., Ltd.    Kuishan, Xinjiang    80    Under planning
China Shenhua Coal to Liquid and Chemical Co., Ltd.    Baotou, Inner Mongolia    50    Under planning
CNOOC Energy Technology & Services Co., Ltd.    Dayawan, Hainan    50    Under planning
Shandong Tongzhou Chemical Co., Ltd.    Dongying, Shandong    50    2016



A 160 kt/a EPDM unit of LANXESS (Changzhou) Chemical Co., Ltd. started production in August 2015. It employs the advanced Keltan ACE catalyst process. A new 50 kt/a unit constructed by Ningbo SK Synthetic Rubber Co., Ltd. was also completed and put on stream.
Completion of these units rapidly enlarged China’s EPR capacity in 2014 and 2015, reaching 370 kt/a by the end of October 2015.

Construction of new units to slow down

As EPR output in China falls short of the demand today, many firms plan to construct or expand EPR units including Ningbo SK Synthetic Rubber Co., Ltd., LANXESS (Changzhou) Chemical Co., Ltd., Shandong Dongying Tianhong Chemical Co., Ltd., Shandong Yuhuang Chemical (Group) Co., Ltd., Yanchang Yan’an Energy and Chemical Group Co., Ltd., Sinopec Beijing Yanshan Petrochemical Co., Ltd., Chongqing Changshou Chemical Co., Ltd., China Shenhua Coal to Liquid and Chemical Co., Ltd. and CNOOC Energy Technology & Services Co., Ltd. The market is slack today, however. Global capacity surplus has already appeared, so quite a few EPR development projects in China have made little progress. The EPR capacity added during 2016-2019 in China will not exceed 200 kt/a. Table 1 shows the EPR units planned to be constructed or expanded in China during 2015-2019.