By Tan Jie
Polybutadiene rubber is a kind of general synthetic rubber synthesized with butadiene and different catalysts and polymerization methods. It has good elasticity, strong abrasion resistance, good low temperature resistance, low heat generation, low hysteresis loss, yaw resistance and crack resistance. It has a wide range of applications in industries such as tires, impact-resistant modified polystyrene (PS) and ABS resins, tapes, hoses and rubber shoes.
De-capacity starts in China
From 2015 to 2019, on the back of the slowdown in the growth rate of downstream demand for polybutadiene rubber, coupled with the serious homogeneity of products and lack of competitiveness, some production lines in China were permanently closed or converted to other synthetic rubber products. The growth of capacity has slowed down significantly, and the trend of de-capacity has begun to become prominent.
The newly built capacities during the period included the 60 000 t/a nickel-based polybutadiene rubber by Shandong Yantai Haopu New Material Technology in 2016, and the 40 000 t/a nickel-based polybutadiene rubber by Liaoning Shengyou Chemical in 2017. At the same time, Sinopec permanently shut down its Shanghai Gaoqiao PC’s 120 000 t/a nickel-based butadiene rubber plant in Pudong. Shandong Yuhuang Huayu Rubber transformed its 80 000 t/a polybutadiene rubber unit into a SBS production line.
In addition, to seek new growth points and enhance market competitiveness, some manufacturers have built flexible lines, which can produce both nickel-based products and rare-earth-based products. In 2017, Zhejiang Transfar Synthetic Materials Co., Ltd., cooperating with Zhejiang University, independently developed the "second generation" rare earth catalytic system and the corresponding aging and polymerization process. It industrialized production on its converted nickel-based 50 000 t/a line, and successfully produced rare earth polybutadiene rubber BR9104 and BR9106. In 2019, PetroChina Sichuan Petrochemical introduced the Russian rare earth neodymium-based polybutadiene rubber production technology and partially modified its 150 000 t/a nickel-based butadiene rubber unit, hence achieving 50 000 t/a neodymium-based butadiene rubber capacity in May 2019, which can be normally switched with the original nickel-based butadiene production.
In 2019, China's polybutadiene rubber capacity reached 1.557 million t/a. The information of major manufacturers and distribution of major producing provinces are shown in Table 1 and Chart 1, respectively.
Chart 1 China's polybutadiene rubber capacities of major provinces and municipalities in 2019
Increased demand for high-performance products
In 2019, China's apparent consumption of polybutadiene rubber was 1.2102 million tons, a year-on-year increase of 8.96%. Automobile tires are the largest consumer, accounting for 70.0% of the total consumption of polybutadiene rubber, followed by high-impact polystyrene and modified ABS resin, accounting for 10.9% of the total; then shoemaking 9.1%, hoses and tapes 6.9%, and others 3.1%. With the transformation of tires from bias structure to radial structure and from inner tubes to tubeless ones, the requirement for high-performance tires and green tires are increasing, hence the demand for polybutadiene rubber, especially high-performance rare earth polybutadiene rubber. In addition, with the rapid development of the domestic electronics and electrical industry, the consumption of HIPS and ABS resins will grow rapidly, and the corresponding demand for polybutadiene rubber will also further rise. It is estimated that in 2024, China's demand for polybutadiene rubber will reach 1.35 million tons.
Market prices will remain low
The market prices of polybutadiene rubber in China are mainly affected by factors such as the market prices of raw material butadiene, downstream (mainly the tire industry) demand, natural rubber market price changes, plant operating rates, and product import prices. In 2020, as the capacity expansion of butadiene was still in progress, the supply of raw materials was even more abundant; coupled with the impact of the Covid-19 epidemic, most downstream manufacturers reduced demand for polybutadiene rubber. The market prices continued to show a downward trend. However, with the improvement of the epidemic situation and the gradual recovery of downstream production, it is expected that market prices will increase in the next few months.
Development trend
Due to the overcapacity of polybutadiene rubber in China in recent years, the originally planned project of 100 000 t/a butadiene rubber flexible unit (nickel/rare earth) of Guangdong Zhanjiang Zhongke Refining & Chemical has been cancelled. The 80 000 t/a butadiene rubber plant (nickel series) project of Jiutai Energy Zhunge’er has been suspended. And no new butadiene rubber project will be launched in China in the next 5 years. The pace of de-capacity is accelerating, and industry concentration may further increase, and the competition among domestic companies will become more intense.
Since there will still be many new butadiene plants launched and put into operation in the future, and these newly butadiene plants have no polybutadiene rubber lines, it is expected that the supply pressure of domestic polybutadiene rubber enterprises will be further relieved. As the supply continues to increase, the feedstock price may fall, leaving the market prices of polybutadiene to fall.
The development trend of lightweight cars, green tires, energy saving, and high performance will affect the supply structure of polybutadiene rubber. With the development of highways and the promulgation of the tire labeling law, "green tires" featuring safety, efficiency, energy conservation and environmental protection have become the mainstream direction of the development of the international tire industry. The tire structure has also evolved from the "three modernizations" (radial, flat, and tubeless) to the "new three modernizations" of low rolling resistance, high performance and multi-function. Higher requirements and new challenges are put forward on tire raw materials, which further force China's polybutadiene rubber industry to break the single pattern of nickel-based products and accelerate the adjustment of industrial structure and the pace of industry transformation and upgrading.
Due to the limitation of production technology and the insufficient development of downstream applications, China will still have to import a large amount of polybutadiene rubbers, especially the rare earth-based products with excellent performance. But imports will gradually decrease. The Ministry of Finance and the State Administration of Taxation jointly issued Announcement No. 15 of 2020 on March 17, 2020, deciding to increase the export tax rebate rate for certain products. Among them, the export tax rebate rate of primary shape butadiene rubber has been increased from 10% in 2018 to 13%. It will bring a favorable condition to the export market of polybutadiene rubber. At the same time, the increase in the tax rebate rate of some tires will stimulate the overall development of China's polybutadiene rubber market.
From the perspective of product consumption structure, the automobile industry will still be the main consumption area of China's polybutadiene rubber, and the consumption will gradually increase, but the proportion will decrease. The demand for impact resistance modification will increase rapidly, being the main driving force for future development. In terms of varieties, with the acceleration of tire green and environmental protection, the consumption of traditional nickel-based products will continue to decrease, and the demand for high-performance products such as rare earth-based polybutadiene rubber will continue to increase.
For the widely used rare earth-based polybutadiene rubber, the research and development of new catalysts and polymerization processes should be strengthened. The pace of localization development of low-cis polybutadiene rubber production technology should also be accelerated. It is necessary to speed up the technology and application development of new product brands and, based on market needs, speed up the industrial production of new rare earth polybutadiene rubber, low-cis polybutadiene rubber, molybdenum-based high vinyl butadiene rubber, polybutadiene rubber with different Mooney viscosities and different oil extensions, high cis polybutadiene rubber for plastic modification and golf ball manufacturing, and chlorinated, epoxidized, carboxylated, halogen sulfonated modified polybutadiene rubber, so as to develop towards the direction of diversification, serialization, specialization, high performance and high added value.
