By Shen Yiting, Gong Yongqiang, Chemsino

BR has extensive applications in the production of rubber products such as tires, rubber/plastic modifiers, rubber belts, rubber hoses and rubber shoes. After developments for long years, homogeneity in the BR sector in China is quite serious, there is an overall status of oversupply and the capacity utilization rate is below 70%. At the same time, high-end BR used in the production of high-quality green tires is still in short supply and needs to rely on import.

Slowdown of capacity growth

   The total capacity of BR in China was around 1 600 kt/a in 2017. Sinopec and PetroChina remain to be mainstream product suppliers. The total capacity of BR in the two companies accounts for over 70% of the national total. No great changes have been seen in the total capacity in recent years. After the super rapid development of the capacity made during the Twelfth Five-Year Plan period, the 60 kt/a BR unit in Yantai HIPRO New Material Technology Co., Ltd. started production in 2016 and in the same year the 120 kt/a BR unit in Shanghai Gaoqiao Petrochemical Co., Ltd. made permanent shutdown and the 80 kt/a BR unit in Shandong Huayu Rubber Co., Ltd. was renovated into an SBS unit. In 2017 the 100 kt/a BR unit in Yangzi Petrochemical Co., Ltd. and the 30 kt/a BR unit in Jinzhou Petrochemical Co., Ltd., both shut down for long years, restarted production and the 30 kt/a BR unit in Liaoning Shengyou Rubber Technology Co., Ltd. was put on stream. Table 1 shows the major BR producers in China in 2017.

Table 1    Major BR producers in China in 2017

Limited change of import amount

   The import amount of BR in China was always kept in a range of 200-280 kt during 2013-2017. The import amount was 267.897 kt in 2017 and the amount exported to China was over 10 kt in 9 countries.

Considerable pressure on downstream tire enterprises

   The major downstream sector of BR is the tire sector. The consumption of BR in the tire sector accounts for around 69% of the total. Around 50% of tires produced in China are used for export. The amount of tires exported by China to the United States made a year-on-year reduction from the highest percentage of 25% (1 200 kt) in 2014 to a percentage of 12.7% (670 kt) in 2017.
   To evade impacts of international trade barriers on the export of tires, tire enterprises such as Linglong Tire Co., Ltd., Zhongce Rubber Group Co., Ltd. and Century Tire Co., Ltd. have already constructed plants or are constructing plants in Southeast Asia and the United States. Raw materials used in overseas plants constructed by tire enterprises are not sourced from China. The export amount of BR in China is small mainly because its export rebate rate is quite low (zero or 5%). The export amount of BR in China was reduced from 25 kt to 21 kt during 2012-2017.
   With the tightening of environmental inspection exercised by the state, the tire market is also faced with “internal worries”. The “Environmental Protection Tax Law of the People’s Republic of China” started implementation on January 1, 2018. In the production of tires some small tire enterprises whose environmental protection measures are not up to standard would release great quantities of polluting gases such as benzene to atmosphere. The collection of the environmental protection tax will make these enterprises unable to bear the pressure. They will either reduce production load or even conduct shutdown. The demand of BR will therefore come further down.

Promising prospect of rare earth BR

   The attention paid by the international market to green tires is getting higher and higher. The tire labeling law issued by EU in 2012 has proposed compulsory requirements on the rolling resistance and antiskid performance of tires. To meet requirements in new overseas laws and regulations on tires and produce high-performance tires with great speed, environmental protection and energy conservation, rare earth BR with higher quality has to be used as raw material.
   The number of enterprises in China that can produce rare earth BR is quite limited. Rare earth BR units include the 30 kt/a unit in Beijing Yanshan Petrochemical Co., Ltd., the 30 kt/a unit in Jinzhou Petrochemical Co., Ltd., the 30 kt/a unit in PetroChina Dushanzi Petrochemical Co., Ltd., the 50 kt/a unit in Qixiang Tengda Chemical Co., Ltd. and the 100 kt/a unit in Zhejiang Transfar Synthetic Material Co., Ltd. Most units can switch production between Nd-BR and Ni-BR. Sichuan Petrochemical Co., Ltd. and Daqing Petrochemical Co., Ltd. will also make renovation to their existing Ni-BR units and use them to produce rare earth BR.
   General-purpose Ni-BR in China has serious homogeneity and surplus capacity. The international market has also proposed higher requirements on the performance and energy consumption of tires. High-performance green tires will therefore become the main development orientation in future. Rare earth BR as a high-quality raw material in line with needs in production will become a new bright spot in the rubber sector.