By Wu Jianbo and Wang Yuying, Research Institute of PetroChina Jilin Petrochemical

NBR is widely used in the production of rubber products such as foam materials, shoe soles, oil hoses, oil seals, seals, automotive accessories, and rubber covered rollers, which are applied in the fields of architecture, automobiles, textiles, wires and cables, printing, fitness equipment, petrochemicals, etc.

Analysis and prospect of production

There were five NBR producers (solid NBR) in China in 2022, with a total capacity of 275 000 t/a, up by 35 000 t/a or 14.58% year on year, which accounted for about 33% of the global total capacity. The new capacity was mainly from PetroChina Lanzhou Petrochemical. The producer built a 35 000 t/a unit in May 2022 based on its NBR packaged technology with independent intellectual property right, put it into production and started selling in June 2022, which also broke the stagnate state of China's NBR capacity since 2016 and made Lanzhou Petrochemical one of the top three global producers (second only to ARLANXEO and Zeon), as well as the leading producer in China because it has the biggest capacity and competitiveness with the most categories and brands. The producers and capacity of NBR in China in 2022 are shown in Table 1.

According to the ownership of producers, the capacity of foreign-funded producers took up the biggest proportion. The foreign-funded producers included Zhenjiang Nantex Co (Exclusively funded by Taiwan Nantex), ARLANXEO-TSRC, and INSA GPRO (Nanjing) Synthetic Rubber Co, with the aggregate capacity accounting for 40.0% of the total. PetroChina Lanzhou Petrochemical was the only state-owned producer, accounting for 36.4% of the total. Ningbo Shunze Rubber Co was a private company, accounting for 23.6% of the total.

As for the regional distribution, the capacity was relatively concentrated. Except for Lanzhou Petrochemical, domestic NBR units were mainly settled in East China, accounting for 63.6% of the totaal.

The utilization rate of NBR capacity in China has been above 80% in recent years, with no significant change. This is mainly because the increasingly updated and mature domestic NBR production technologies are improving the quality and performance of products, as well as expanding the application fields.

According to data from OilChem, China's NBR production reached 234 000 tons in 2022, up by 17.5% year on year, and the utilization rate of capacity was 85.1%. Lanzhou Petrochemical contributed the biggest increase in output in line with the start-up of its new unit. Ningbo Shunze was the second biggest contributor, as the producer expanded NBR production due to the relatively weaker latex market in 2022.

Figure 1 shows the changes in China's monthly NBR production/capacity utilization rate in 2022. Table 2 shows China's NBR capacity, output, and capacity utilization rate in the past five years.

Figure 1 China's monthly NBR production/capacity utilization rate in 2022

Few NBR producers were reported to have new construction/expansion projects in China, but ARLANXEO-TSRC showed explicit intention of expansion. The producer announced moving the joint venture ARLANXEO-TSRC (Nantong) Chemical Industry Co., Ltd. from the north area of Chemical Park in Nantong Economic and Technological Development Zone, Jiangsu Province, to the south area in February 2022, and then increasing the NBR capacity of the new plant from 30 000 t/a to 40 000 t/a. By then, the domestic NBR (solid rubber)capacity reached 285 000 t/a.

Market analysis and forecast

The growth rate of NBR consumption in China has been moderating in recent years on the back of the huge manufacturing capacity in China. The apparent consumption of NBR reached 289 000 tons in 2022, an increase of 3.6% from 2021. Table 3 shows the supply-demand balance of NBR in China from 2018 to 2022.

NBR is mainly used in the fields of rubber hoses and tapes, foaming materials, sealing products, rubber covered rollers, and shoe materials in China. Figure 2 shows the proportion of China’s NBR downstream consumption in 2022. In addition, domestic hydrogenated NBR (HNBR) increased in 2022 as a result of reduced import volume, which, in turn, pushed up NBR consumption. 

Figure 2 The proportion of China’s NBR downstream consumption in 2022

NBR consumption was mainly concentrated in East China, North China, and South China in 2022, with the combined consumption in East China and North China accounting for about 75% of the total. It is expected that the consumption will be still centered in the three regions in the coming few years. 

The expansion of NBR capacity in 2022 will give rise to an increase in the NBR market capacity. In the meanwhile, downstream demand will be driven by the wide applications of NBR in major industries for the national economy such as petrochemical, coal, and machinery manufacturing. The rapid development of heat-preservation new building material industry under the national energy-saving development strategy and regulatory requirements for energy conservation and green buildings will also give support to the development of downstream demand. Therefore, it is expected that the supply and demand of China's NBR market will continue to grow in a slow pace in the next five years.

Analysis and forecast of import and export

1. Analysis of import

The import volume decreased because of higher self-supply rate in China and restricted demand. The volume was 75 000 tons in 2022, a decrease of approximately 15.7% from 2021.

According to import sources, South Korea, Russia, Japan, and France still ranked the top four NBR sources for import volume in China, accounting for 41.6%, 27.5%, 18.5%, and 6.1% of the total import volume, respectively.

As for trading modes, general trading was dominant in 2022, accounting for approximately 69.3% of the total import volume. The import process is more convenient than other trading modes, so the import volume was still bigger during the year. Logistics goods in customs special supervision areas ranked the second, with the volume accounting for approximately 14.5% of the total import volume. Processing trade with imported materials accounted for approximately 10.1%, ranking the third. The proportion of goods by other trading modes took up 6.1%.

2. Export

China's NBR export volume has been relatively small in recent years. The volume was at 20 000 tons in 2022, up by 122% year on year. The main export destinations were concentrated in Asia. According to export trading modes, general trading took the lion’s share, accounting for approximately 59.6% of the total export volume. Logistics goods in customs special supervision areas ranked the second, with the volume accounting for approximately 37.9% of the total. The proportion of goods by other trading modes took up 2.5%.

R&D and technological progress

China's NBR industry has seen multiple achievements achieved in R&D of new products and modification technologies in the past year.

1. PetroChina attempted to launch a new NBR product with acrylonitrile content and high Mooney viscosity during its trial run.

On April 12, 2022, the NBR2808 brand of "Industrial test of new wide-temperature-range and environmental-friendly NBR product" jointly researched by PetroChina Lanzhou Chemical Research Center and Synthetic Rubber Plant of Lanzhou Petrochemical was put into mass production and the products met the technical index requirements.

2. PetroChina successfully produced the first NBR industrialized product with low bound acrylonitrile content in China

On September 27, 2022, PetroChina Lanzhou Petrochemical’s newly-built 35 000 t/a specialty NBR unit successfully produced NBR1906, the first NBR industrial product with low bound acrylonitrile content in China. The grade was proved to meet all technical indicators. It is widely used in oil resistant fields such as packaging, gaskets, oil seals, etc. that require high low-temperature bending performance.

3. Sinopec successfully developed hydrogenated NBR technology 

Qilu Petrochemical successfully started up its 50 kt/a HNBR unit adopting Sinopec’s independently developed technology. The hydrogenation degree was more than 99%, signaling the success of Sinopec's HNBR technology development and the start of commercial production. 

4. Development of random hydroxyl liquid NBR

Anqing Hualan Technology Co., Ltd. has developed a kind of random hydroxyl liquid NBR, increasing the list of liquid NBR with random groups. Adopting emulsion polymerization method to make the random hydroxyl liquid NBR, the production process is simple and less costly. 

5. Development of fluorinated NBR

Lanzhou Chemical Research Center of Sinopec Research Institute used low-temperature emulsion polymerization process to produce fluorinated NBR copolymerized by butadiene, acrylonitrile, fluorinated monomer and reactive coupling agent. The Center studied the distribution of structural units of fluorinated monomer in quaternary polymers, and the difference of performance between fluorinated NBR with low fluorine content and fluorinated NBR with high fluorine content.

6. Development of NBR solution that can be directly hydrogenated

Qingdao Bioenergy and Process Research Institute of Chinese Academy of Sciences developed a kind of NBR solution that can be directly hydrogenated. The new-structure category by regulating solvent effect provides a pathway for the industrial production of hydrogenated NBR.

Suggestions on development 

Producers are facing heavier pressure in line with increasing capacity. There are some suggestions as below in order to enhance producers’ competitiveness and give a push for healthy and sustainable industrial development:

First, to optimize production processes, reduce costs and increase efficiency, as well as lift market shares. Producers should actively control and optimize the production process of existing grades so as to gradually reduce costs and increase efficiency, expand sales channels, and effectively lift market share.

Secondly, to put more investments in green environmental protection technology for clean production. Producers should strengthen R&D and application of environmentally-friendly additives, adhere to the principles of clean production, and meet the development needs of domestic and foreign markets, helping enhance the overall competitiveness of the NBR industry continuously.

Thirdly, to target high-end and differentiated products, and avoid homogeneous competition. Domestic NBR producers and related R&D institutes should take the demand for high-end and differentiated products into consideration so as to achieve diversified development and gradually achieve the ultimate goal of sustainable development.

Fourth, to improve technical services and support expansion of products market. Although China has made significant progress in the NBR field and its products can compete with imports in terms of performance, some producers are still using imported NBR as usual. It is recommended that domestic NBR producers should further provide technical services to bolster up expansion of the products market.