By Tan Jie, Research Institute of China Petrochemical Corporation Maoming Branch

Production status

Since the early 1990s, China's production capacity of styrene-butadiene block copolymer (SBC) has experienced a steady growth. As of the end of September 2023 (hereinafter expressed in 2023), China's SBC production capacity reached 2.130 million t/a. Among them, the production capacity of styrene butadiene styrene (SBS) accounted for about 75.6%, styrene ethylene butylene styrene (SEBS) accounted for about 11.5%, styrene isoprene styrene (SIS) accounted for approximately 12.0%, and SEPS accounted for around 0.9%. Table 1 shows the key SBC manufacturers in China in 2023.

SBC units in China are relatively concentrated, mainly in South China (including Guangdong and Hainan), Central China (including Hunan) and East China (including Shandong, Zhejiang and Jiangsu). The combined production capacity of these three regions reached 1.78 million tons in 2023, accounting for approximately 83.6% of the total production capacity. Specifically, the production capacity in South China reached 800 000 t/a, accounting for approximately 37.6% of the total; East China reached 700 000 t/a, accounting for approximately 32.9% of the total; and Central China reached 380 000 t/a, accounting for approximately 17.8%. In addition, North China (including Beijing and Tianjin) had a production capacity of 120 000 t/a, accounting for approximately 5.6% of the total; The Northwest region (including Xinjiang) had a production capacity of 80 000 t/a, accounting for approximately 3.8%; The production capacity of Northeast China (including Liaoning) was 50 000 t/a, accounting for approximately 2.3%.

In 2023, Guangdong was the largest SBC producing province in China, with a production capacity of 530 000 t/a, accounting for approximately 24.9% of the total production capacity. The production capacity of China's SBC in major provinces and cities in 2023 is shown in Figure 1.

Figure 1 The production capacity of China's SBC in major provinces and cities in 2023

The nature of China's SBC production companies is gradually becoming more diversified. Sinopec Group had a total production capacity of 790 000 t/a, accounting for approximately 37.1% of the total domestic production capacity. The production capacity of China National Petroleum Corporation was 80 000 t/a, accounting for approximately 3.8% of the total. The production capacity of foreign-funded enterprises was 480 000 t/a, accounting for approximately 22.5% of the total. Other enterprises had a total capacity of 780 000 t/a, accounting for approximately 36.6% of the total. Huizhou LCY Elastomers Corp. is currently the largest SBC manufacturer in China, with a production capacity of 400 000 t/a in 2023, accounting for approximately 18.8% of the total domestic capacity; followed by Sinopec Baling Petrochemical Co., Ltd., with a production capacity of 380 000 t/a, accounting for approximately 17.8%; the third largest is Ningbo Changhong Polymer Scientific and Technical Inc., with a production capacity of 250 000 t/a, accounting for approximately 11.7%.

As new and expanded units come on stream, the product structure of China's SBC has also changed, offering a variety of products such as SBS, SIS, SEBS, and SEPS, among which the production capacity of SIS and SEBS continues to grow.

Import and export situation

From 2018 to 2022, the import volume of China's SBC showed a development trend of first declining, then increasing, and then declining again. The import volume in 2018 was 58 300 tons, while the import volume in 2022 was 45 800 tons, a year-on-year decrease of approximately 26.8%. Among them, SBS was the leading imported product, accounting for approximately 56.3% of total imports in 2022, while imports of SIS and SEBS accounted for approximately 21.8% and 21.9% respectively. On the contrary, the export volume of China's SBC has shown a continuous growth trend in recent years. The export volume rose from 93 400 tons in 2018 to 155 100 tons in 2022, a year-on-year increase of approximately 31.0%, of which the exports of SBS accounted for around 47.8%, SIS approximately 32.2%, and SEBS about 20.0%.

Consumption status

From 2018 to 2022, the apparent consumption of SBC in China showed a development trend of first increasing year by year and then declining. In 2018, the apparent consumption was 1.033 million tons. In 2022, it increased to 1.183 million tons, a year-on-year decrease of approximately 10.6%. In 2022, the consumption of SBS accounted for approximately 72.5%, SIS approximately 13.0%, SEBS approximately 13.5%, and others approximately 1.0%. Figure 2 shows the supply and demand situation of China’s SBC from 2018 to 2022.

Figure 2 The supply and demand situation of China’s SBC from 2018 to 2022

In 2022, the consumption structure of SBS in China was diversified, with the demand for SBS in road asphalt modification accounting for about 38% of the total consumption, shoe materials accounting for 28%, waterproofing membranes accounting for about 18%, TPE blending and polymer modification accounting for around 9%, and other fields such as adhesives accounting for about 7%. The future development of SBS will mainly be driven by the demand for road asphalt and waterproofing membranes. It is expected that by 2027, China's demand for SBS will reach 950 000 tons.

SIS in China is mainly used in hot melt adhesive and waterproofing membranes. In 2022, the demand for SIS in the field of hot melt adhesive accounted for about 93% of the total consumption, self-adhesive waterproofing membranes accounted for about 3% and other aspects accounted for about 4%. With increasingly stringent environmental protection requirements, the demand for hot-melt pressure-sensitive adhesives is expected to increase, thereby promoting the demand for SIS to a certain extent. It is expected that China's demand for SIS will reach 220 000 tons in 2027.

SEBS in China is mainly used in coating materials, wires and cables. In 2022, the demand for SEBS for coating materials accounted for about 40% of the total consumption, wires and cables accounted for about 27%, and household products accounted for about 10%, medical materials accounted for about 6%, sealing materials accounted for about 6%, turf and plastic runways accounted for about 5%, and other aspects accounted for about 6%. It is expected that by 2027, China's demand for SEBS will reach 260 000 tons.

Together with SEPS and other applications, the total demand for SBC in China is expected to reach 1.45 million tons by 2027.

Future trends

(1) As domestic refining and chemical integration enterprises continue to commission upstream units, the SBC industry, as downstream supporting units, will further expand its production capacity. In the next few years, China will still have new or expanded SBC units to be put into production including Fujian Fuhua Luhua New Materials Co., Ltd., Ningbo Jinhai Chenguang Chemical Corporation, Shanghai Jinshan Baling New Materials Co., Ltd., PetroChina Guangxi Petrochemical Co., Ltd. and Huizhou LCY Elastomers Corp. The production capacity of SBC has once again entered a fast lane. It is expected that by 2027, China's SBC production capacity will reach 2.66 million t/a. The production capacity of SBC will continue to expand, which may lead to intensified competition in the domestic market in the future.

(2) The newly-built or expanded SBC units in China will be mainly concentrated in East China and South China. The further increased concentration will lead to more intensified competition in these two regions. At the same time, due to geographical and cost advantages, these two regions will become the main areas for future exports. The newly built units are still mainly flexible units, but the production of single products exclusively for SEBS and SEPS has increased, further increasing the production capacity of SEBS and SIS in the future.

(3) The growth rate of SBC consumption cannot keep up with the growth rate of production capacity, leading to an intensification of the contradiction of overcapacity. As a result, imports are likely to gradually decrease in the future.

(4) From the perspective of industry development, the centralized expansion of production capacity in the future will inevitably lead to oversupply in the market. The oversupply of SBS will inevitably prompt companies to evolve into a diversified development model. Some companies with strong R&D capabilities are gradually expanding into high-end and cutting-edge fields, such as modified SBS, SEPS and differentiated SEBS. Other manufacturing companies can also switch to other products such as solution-polymerized styrene-butadiene rubber and low-cis cis-butadiene rubber. 

Development proposals

(1) Take second consideration in rebuilding or expanding production units. China's SBC production capacity has reached a state of overcapacity. Therefore, careful consideration should be given to the construction of new or expanded units in the future. Multiple factors such as technology sources and advancements, raw material sources, product structure, and downstream demand should be taken into account to avoid blind competition among domestic companies.

(2) Efforts should be made in increasing research and development, accelerating the development of new catalysts and new processes, optimizing production process technology, reducing energy and material consumption, and achieving clean production.

(3) For existing product brands, it should maintain stable growth while ensuring product market retention rate, optimize or adjust the product structure, such as the co-production of SBS/SIS/SSBR/LCBR, the co-production of SEBS/SEPS and others, improve product quality standards and control systems to match product structure with market structure.

(4) There should be an increased focus on developing new product brands, and developing high-end new products for polymer modification and adhesives, broadening the application fields, actively developing upgrading products such as epoxidized SBS (ESBS) and SBS functional graft modification to meet domestic demand and achieve greater economic benefits.

(5) It is important to do market segmentation according to the market needs, develop specialized, differentiated, high-end and customized new products, and improve technical services during product application.

(6) It shall improve product quality, reduce production costs, actively expand exports, and participate in the international market competition to alleviate the increasing domestic competitive pressure.