By Ye Lu, Oilchem

Analysis of supply and demand 

1. Capacity

Figure 1 and Figure 2 respectively show the changes in the capacities of butadiene rubber (BR) and styrene butadiene rubber (SBR) in China after 2019.

Figure 1 China's BR capacity, 2019-2023

Figure 2 China's SBR capacity, 2019-2023

As for BR, in 2022, both Qixiang and Heze Kexin expanded their capacities by 40 000 tons; Zhejiang Transfar increased its neodymium-based polybutadiene rubber (NdBR) capacity by 50 000 tons; and Shandong Yihua increased its capacity by 100 000 tons. Zhejiang Petrochemical's BR plant was put into production in February 2023. Thus, the total capacity in China reached 1.862 million tons by 2023, with a five-year compound annual growth rate of 3.67%.

The growth in SBR capacity is mainly seen in the solution-polymerized segment. In 2022, Dushanzi Petrochemical’s 60 000 tons of solution-polymerized SBR were put into production. In 2023, the capacity of solution-polymerized SBR continued to increase, with normal production of Zhejiang Petrochemical's 60 000 t/a solution-polymerized SBR unit and new products from Dushanzi Petrochemical’s newly-added 25 000 t/a solution-polymerized unit. As of the end of 2023, the total capacity of SBR was estimated at 1.855 million tons, with a five-year compound annual growth rate of 2.66% or capacity increments of 85 000 t/a. BR capacity has become the biggest in the synthetic rubber industry.

2. Capacity distribution by enterprise nature

Figure 3 and Figure 4 respectively indicate the distribution of BR and SBR capacities in China in 2023 according to the nature of enterprises. It is clear that PetroChina and Sinopec have a bigger portion, but with the increasing capacities of private enterprises in recent years, especially for BR, the proportion of these enterprises’ capacities is gradually rising. As of 2023, the proportion of BR and SBR capacities from enterprises excluding PetroChina and Sinopec increased by 3%.

Figure 3 Distribution of BR capacities in China by enterprise nature, 2023

Figure 4 Distribution of SBR capacities in China by enterprise nature, 2023

3. Capacity distribution by region

North China is the main production area of BR in China, accounting for 40% of the total capacity, followed by East China and Northeast China (see Figures 5 and 6). The main reason behind it is the relatively concentrated consumption fields of downstream tires and other rubber products. In addition, with domestic big-sized refining and chemical projects coming on stream, it is more convenient to obtain raw materials. There are relatively concentrated ports in North and East China with good transportation conditions.

Figure 5 Distribution of BR capacities by region, 2023

Figure 6 Distribution of SBR capacities by region, 2023

East China is always the main production area of SBR in China, accounting for 33% of the total, followed by Northeast and North China. The main reason bolstering the development of SBR capacity is that the region is adjacent to consumers and there are refining and chemical projects.

4. Production

Figure 7 and Figure 8 show China’s BR and SBR output during 2018-2023. In 2023, domestic BR output was estimated at 1.2495 million tons, with operating rate estimated at 67.39%; the SBR output was at 1.242 million tons, with operating rate estimated at 66.95%

Figure 7 BR output in China, 2018-2023

Figure 8 SBR output in China, 2018-2023

As of August 2023, the production of BR only increased by 5.06% year on year while that of SBR decreased by 3.92% year on year. The year 2023 saw the start-ups of new BR and SBR units, but the output was limited. In addition, there were planned and temporary maintenance shutdowns, coupled with unexpected events that hampered output, so the output in 2023 was estimated to be quite limited. 

5. Imports

The import volume and growth rates of BR and SBR in China during 2018-2022 are shown in Figure 9 and Figure 10, respectively. The import volume of SBR decreased as some of it was replaced after rising to 392 100 tons in 2020, the highest in nearly five years. 

Figure 9 Import volume and growth rate of BR in China, 2018-2022

Figure 10 Import volume and growth rate of SBR in China, 2018-2022

In 2022, the import volume of BR was 195 800 tons, up by 4.20% year on year; while the import volume of SBR was 306 600 tons, down by 14.57% compared with the previous year.

6. Exports

The export volume and growth rates of BR and SBR in China during 2018-2022 are shown in Figure 11 and Figure 12, respectively. The export activities of SBR were supported by increased output and heightened quality of domestic BR and SBR products, combined with export tax rebate policy. As a result, the export volume of BR and SBR increased sharply, reaching 143 800 tons and 110 800 tons in 2022, respectively.

Figure 11 Export volume and growth rate of BR in China, 2018-2022

Figure 12 Export volume and growth rate of SBR in China, 2018-2022

7. Apparent consumption

The apparent consumption of BR in China showed a stepwise growth from 2018 to 2022, with an average annual compound growth rate of 3.92% in the past five years. At the end of 2022, the apparent consumption reached 1.2281 million tons, up by 8.74% year on year.

The apparent consumption of SBR in China decreased after rising during 2018-2022 (see Figure 13), with an average annual compound growth rate of 3.92% in the past five years. At the end of 2022, the apparent consumption reached 1.4317 million tons, down by 4.55% year on year. 

Figure 13 Annual apparent consumption of BR in China, 2018-2022