Time to Make Headway Toward High Added-value Synthetic Latex
Click:0    DateTime:Dec.24,2021

Zhang Cheng, Pang Liwei, CNCIC

In 2020, the capacity of styrene butadiene latex accounted for 69% in China’s synthetic latex market; nitrile latex held the second largest capacity, taking up 29% of the total, as shown in Figure 1. Both styrene butadiene latex and nitrile latex producers have been developing high added-value products in recent years.

P22

Figure 1: Proportion of China's synthetic latex capacities in 2020

Styrene butadiene latex: high solid styrene butadiene latex is promising due to wide applications

Styrene butadiene latex industry in China is developing fast in recent years, mainly attributed to the continuous growth in downstream papermaking sector. Papermaking and carpet backing are major derivatives of styrene butadiene latex, and they accounted for 89% of China's styrene butadiene latex consumption in 2020, as shown in Figure 2.

P23-1

Figure 2: Applications of styrene butadiene latex in China in 2020

The solid content of homemade styrene butadiene latex products is ranged between 20% and 50%. There are a very small number of high solid styrene butadiene latex (referring to styrene butadiene latex with solid content higher than 60%) producers in China. Only Shandong Jingbo made clear that it produces high solid styrene butadiene latex, while other producers obtain high solid styrene butadiene latex by evaporating water from ordinary styrene butadiene latex.China's high solid styrene butadiene latex is mainly relying on imports, as domestic solid styrene butadiene latex market is weighed down by small output, yet-to-improve quality and limited circulation.

According to H. S. code, most of the imported cargoes listed in H. S. code 40021190 are high solid styrene butadiene latex that requires high technology. From 2016 to 2019, the import volume of high solid styrene butadiene latex in China turned into a downtrend after an increase, but year 2020 saw a sharp rise in the volume, as shown in Figure 3, hitting 93 000 tons, an increase of 13.37% from 2019.

3-P3

Figure 3: Import volume of H. S. code 40021190 from 2016 to 2020

High solid styrene butadiene latex imports are likely to be replaced by domestic products in the future, as more and more domestic latex producers have made breakthroughs in production technologies.In view of superior properties of high solid styrene butadiene latex over ordinary styrene butadiene latex, downstream producers will turn to using high solid styrene butadiene latex, which will shore up the development of the high solid styrene butadiene latex industry. Therefore, the market outlook is bright.

Nitrile latex: the market has gained opportunities amid the epidemic; the capacity may turn excessive in the future

Demand for nitrile latex gloves surged due to the outbreak of COVID-19 globally in 2020, which resulted in a sharp rise in the prices of nitrile latex. Against the backdrop of big margin room, a big number of other synthetic latex production lines switched to the production of NBR latex.

The profits of nitrile latex stopped rising abruptly at the beginning of 2021. On one hand, the demand shortage was eased as producers who had switched production or expanded production released capacities. On the other hand, the quality of nitrile latex products from these producers was not high enough to meet demand.

The pace of producers switching to nitrile latex production is slower than expected and there are still a large number of nitrile latex projects yet to be constructed or under construction. Once they are fully available in the market, the total capacity of nitrile latex in 2023 will have an increase of 280% over 2020 and hit 3.18 million tons. Thus, the supply in the nitrile latex market will shift from tight to much surplus. At present, some producers are considering switching back to styrene butadiene latex production. Figure 4 shows the supply proportion of nitrile latex in the first half of 2021.

P24

Figure 4: Supply proportion of nitrile latex in the first half of 2021

Synthetic latex market outlook: it’s time to make headway to high-end products given the fierce competition of low-end products

With the development of China's national economy and the improvement in people's living standards, the application fields of synthetic latex are also developing from traditional sectors like papermaking, carpets and gloves to high-end fields such as adhesives, water-based coatings and foamed rubber paper products. The release of massive low-end capacities will speed up the competition and integration in the synthetic latex industry. Chinese synthetic latex producers can strengthen themselves in the following aspects to improve product quality:

1. Producers reported laggard control means of the stability of synthetic latex batches, as well as low automation and intelligence, so the product quality is unstable. Synthetic latex producers should actively explore the technological transformation of production units so as to improve the stability of production.

2. The synthetic latex industry should heighten the requirements of energy conservation, consumption reduction and environmental protection development, so as to accommodate the government’s carbon peaking and carbon neutrality goals and strict energy consumption management. For example, producers can shorten reaction time, reduce energy consumption and increase economic benefits.

3. Producers should actively develop new latex polymerization technologies, such as high solid content latex production technology, profile particle latex production technology, and nano latex production technology.

     4. Producers should accelerate the research and development of product application technologies and explore application fields extensively, such as artificial leather, lithium battery binder, and sponge puff.