By Guo Yating, OilChem China
Surplus of mainstream products
As of December 2019, China's synthetic rubber capacity has reached 6.347 million t/a. In terms of market segments, styrene-butadiene rubber and butadiene rubber are widely used and have the largest demand. Benefiting from the advantages of complete lines of raw materials, Sinopec and PetroChina are the two leading companies in China's synthetic rubber industry. Their total synthetic rubber capacity accounts for more than half of the nation's total.
In 2019, China's synthetic rubber output was about 3.7995 million tons, and the output growth rate continued to narrow. In terms of specific varieties, the production of butadiene rubber, SBC, nitrile rubber, and ethylene-propylene rubber increased significantly. Among them, SBC output has exceeded one million tons, very eye-catching.
In 2019, some synthetic rubbers, due to the lack of raw material advantages and the serious homogenization, suffered from long-term shutdown, and the problem of overcapacity in the industry has become increasingly prominent. Butadiene rubber and isoprene rubber were two most influenced products.
The self-sufficiency rate of China's synthetic rubber in 2019 was 79.07%; the import volume was still large, and the self-sufficiency of products like butyl rubber, ethylene-propylene rubber, isoprene rubber, etc. was significantly lower than the average level. Take butyl rubber for instance. Its annual self-sufficiency rate in 2019 was only 43.53%, and the imports reached over 200 000 tons.
Industry development trend
1. Establish upstream and downstream strategic alliances
In the next 5 years, China's butadiene and styrene are expected to embrace a huge amount of new capacities, and such growth rate will be significantly higher than the expansion of downstream products. By then, the supply of raw materials will be more ample. The difficulty of the operation of synthetic rubber companies which need to purchase raw materials is expected to decline. The establishment of strategic alliances between upstream and downstream in the industrial chain is bound to enhance the competitiveness of the entire industrial chain.
2. The development of green industries and environmentally friendly products has become a top priority
China's tire industry is highly export-dependent, and the implementation of the labeling law will inevitably require the development of high-performance tires and green tires. The rapid development of domestic highways will promote the development of high-performance tires in the direction of radial, flat, tubeless, and green tires. The rubber raw material should not only meet the requirements of the tire manufacturing process, but also meet the requirements of high speed, safety, energy saving and environmental protection. It will significantly increase the demand for environmentally friendly grades of synthetic rubber.
3. Synthetic rubber products should be high-end and customized
With the development of synthetic rubber products, high-end and customized synthetic rubbers continue to emerge, however, the Chinese synthetic rubber market still relies on imports in terms of high-quality, environmental-friendly synthetic rubber products. Only by grasping the development direction of synthetic rubber, increasing investment in research and development, improving production and application technology levels and innovation capabilities; improving product quality; developing high-performance, customized product brands, and enriching product lines, enterprises can increase the self-sufficiency and reduce import dependence of the entire industry.
Suggestions for future development
China's synthetic rubber industry has a severe excess of some mainstream products. It is recommended to integrate or shut down some long-term idle plants and restrict the launch of new capacities for the products that are already in surplus supply, so as to increase the capacity utilization of the entire synthetic rubber industry.
As for the direction of product structure adjustment, it is necessary to research and develop new and environmental-friendly grades and modify or upgrade the idle lines to reduce the import dependence of rare-earth butyl rubber, solvent-polymerized styrene-butadiene rubber, special varieties of special rubber, or environmentally friendly synthetic rubber products.
Meanwhile, synthetic rubber companies need to improve and perfect their service system, establish a good brand image with high-quality products and services, increase their competitiveness in the domestic market, and further expand the international market. They need to pay close attention to the mainstream international synthetic rubber products’ market and technology status and clarify product positioning, so as to increase the share of domestic synthetic rubber products in the international market and increase exports.
