Chi Hongquan, China Petroleum and Chemical Corporation Qilu Branch
From 2017 to 2021, the growth of China's Nitrile Butadiene Rubber (NBR): production stagnated, the five-year average annual compound growth rate of production was 6.2%, the growth rate of import volume was 0.8%, the five-year average compound growth rate of apparent consumption was 4.1%, and the growth rate of export volume was 7.6%. The domestic supply of NBR is expected to reach 235 000 tons in 2026, and the consumption will achieve 291 000 tons.
Domestical NBR production status
By the end of 2021, there were 5 NBR manufacturers in China (See Pic 1), with a total capacity of 250 000 t/a. There were no new or shut- down devices added during the year. Among them, enterprises Lanzhou Petrochemical and Ningbo Shunze Rubber ranked the first regarding capacity, both of which achieved 65 000 t/a, accounting for 26% of the total capacity, and the second was Zhenjiang Nantex Industry, with the capacity of 60 000 t/a, accounting for 24% totally. Both Arlanxeo-TRSC and Insa Gpro had 30 000 t/a, accounting for 12% of the total capacity. Except for Lanzhou Petrochemical, China's NBR plants are mainly located in East China.
Pic 1 China’s NBR market supply distribution
In the past five years, the overall operation rate of domestic NBR plants has been around 80% on average, and the industry output has shown rapid growth in the early stage and slow reduction in the later stage (See Pic 2). In 2021, the average annual operation rate of domestic NBR plants was 81.8%, 2.8% lower than previous year while the annual NBR capacity was about 196 000 tons, 3.3 percentage points lower than the last year.
Pic 2 China’s NBR output and capacity utilization statistics 2017-2021
Consumption analysis
NBR, widely used in vehicle, aerospace, oil exploration, petrochemical, textile, wire and cable and printing industries, is the most used special synthetic rubber. In recent years, the downstream applications of NBR in China are mainly concentrated in the fields of pipe and belt products, foam materials, sealing products, wires and cables and industrial rubber-covered roll (See Pic 3).
Pic 3 Downstream demand structure of China's NBR in 2021
In 2021, the main NBR consumption areas in China focused on East, North and South China and other regions (See Pic 4), of which East China accounted for 41%, North China 34%, South China 17%, and other regions 8%. The consumption of East and North regions occupied 75% totally. In the next few years, the focus of domestic consumption will still be put on these three regions.
Pic 4 Regional proportion of NBR consumption in China in 2021
Status analysis on NBR import and export
The compound annual growth rate of China's NBR import was 0.8% from 2017 to 2021. In 2021, the domestic import volume was 89 000 tons, 6.4% lower than the previous year, and the import dependence was about 32.8%, a decrease of 3.3 percentage points from 2020 (See Pic 5). Imports mainly came from countries including South Korea, Japan and Russia (See Pic 6). The imports of NBR from the above three countries in 2021 were 39 000 tons, 17 000 tons and 16 000 tons respectively.
Pic 5 Statistics of China's NBR imports from 2017 to 2021
Pic 6 Source distribution of China's NBR in 2021
Regarding the trade modes, general trade imports accounted for the largest proportion, followed by processing imported materials and logistics goods in special customs supervision areas (See Pic 7).
Pic 7 Distribution of China’s NBR import trade modes in 2021
From 2017 to 2021, the compound annual growth rate of China's NBR export volume was 7.6% (See Pic 8), but the volume base was small, with an annual average of 11 000 tons, of which the export volume of 2019 reached the highest level - 13 000 tons.
Pic 8 China’s NBR export volume statistics 2017-2021 (10kt)
Development forecast of market supply and demand balance
From 2017 to 2021, China's NBR capacity remained at around 250 000 t/a with an average annual compound growth rate of 6.2% (See Table 1). The compound growth rate was 4.1%. The growth of capacity was stagnant with insufficient domestic supply. The average annual supply and demand gap within the five years was about 77 000 tons. In 2021, the apparent consumption of NBR in China was about 277 000 tons, 9 900 tons lower than that of 2020. The growth rate of apparent consumption dropped 1.7% than a year ago, and the gap between supply and demand was about 80 000 tons, which was basically the same as the last year.
In 2022, with the volume expansion and mass production of Lanzhou Petrochemical and Ningbo Shunze Rubber plants, the domestic NBR capacity is expected to achieve 325 000 t/a, up 35.4% from the last year (See Table 2), the output will be about 220 000 tons, which will see a year-on-year increase of 12.1%. The main downstream application areas are pipe belt and sealing products. Under the requirements of national energy-saving development strategy and green buildings, the advance of insulation material of building industry will promote downstream demand. It is expected that the consumption will be around 285 000 tons (See Pic 9).
Pic 9 Forecast on supply-demand balance of China’s NBR from 2022 to 2026
The supply and demand of China's NBR may carry on sluggish growth from 2022 to 2026. It is expected that the domestic supply of NBR will increase by 3.7% annually in the following five years, and the domestic consumption will increase by 1% annually. The import volume is almost the same as the current value, keeping at an annual average of 87 000 tons, and the export volume will climb slightly, with an annual average of 27 000 tons. In 2026, the domestic supply and consumption of NBR will grow to 235 000 tons, and 291 000 tons respectively. The balance between supply and demand in the domestic market will reduce from 80 000 tons in 2021 to 56 000 tons.
