Demand for Synthetic Rubbers Rises Stably

1. Output increased rapidly

With 100 thousand t/a SBR (styrene butadiene rubber) unit in
Sinopec Shanghai Gaoqiao Petrochemical Co., Ltd. and 10 thousand
t/a hydrogenated SBS (styrene-butadiene-styrene block
copolymer) unit in Sinopec Baling Petrochemical Co., Ltd. being
put into operation, the output of synthetic rubbers increased
rapidly. According to the statistics made by the National Bureau
of Statistics of China, the output of synthetic rubbers in China
was 1.845 million tons in 2006, an increase of 11.1% over 2005.
The output of SBR (styrene-butadiene rubber) was the highest,
accounting for 31.5% of the total. Sinopec Beijing Yanhua
Petrochemical Company Ltd. is the largest synthetic rubber
producer in China and the output of the company was 263 thousand
tons in 2006, accounting for 14.3% of the national total.

2. Consumption rose steadily

The apparent consumption of synthetic rubbers in China was
around 3.06 million tons in 2006, an increase of 18.2% over 2005.
In the total consumption, the proportion of domestic products
was 60.2%.
   Synthetic rubbers in China are mainly used in tire and
shoemaking sectors. In varieties used in the tire production,
SBR and BR (cis-1,4-polybutadiene rubber) have an abundant
supply, IIR (isobutadiene-isoprene rubber) has heavy import
dependence and there is yet no production of halogenated IIR and
isoprene rubber that can replace natural rubber. In varieties
not used in the tire production, NBR (acrylonitrile-butadiene
rubber) and EPR (ethylene-propylene rubber) still mainly depend
on import. The output of NBR, EPR and IIR in China has reached
the design capacity. The increase of the supply amount will have
to come from the new-round expansion of the capacity and
construction of new units.

3. Import Increased rapidly

Due to the rapid demand increase for synthetic rubbers, since
2003, the amount of synthetic rubbers imported by China has been
more than 1 million tons each year. The imported amount of
synthetic rubbers reached around 1.3 million tons in 2006, an
increase of 19.3% over 2005.
   China's exported amount of synthetic rubbers has not been
large. It was around 78 thousand tons in 2006, a drop of around
14.3% from 2005.

4. Capacity will increase considerably

China's rubber industry will continue to develop rapidly and
will provide an opportunity to the development of the synthetic
rubber sector. According to preliminary estimates, the demand
for synthetic rubbers in China will increase stably during
2007-2010 and reach around 3.55 million tons in 2010. The demand
for the 7 major varieties (SBR, BR, NBR, CR (chloroprene rubber),
IIR, EPR and SBS) will be around 2.59 million tons.
    The 100 thousand t/a SBR unit in YPC-GPRO (Nanjing) Rubber
Co., Ltd. conducted wet commissioning and manufactured
qualified products. (CCR 2007, No.17) A group of new synthetic
rubber units are already being constructed or planned for
construction in China today. They include 100 thousand t/a SBR
in CNPC Lanzhou Petrochemical Company Ltd., 50 thousand t/a SBR
in Bridgestone (Huizhou) Synthetic Rubber Co., Ltd., 100
thousand t/a SBS unit in Lee Chang Yung of Taiwan province, 30
thousand t/a halogenated IIR in Sinopec Beijing Yanhua
Petrochemical Company Ltd., 40 thousand t/a EPR expansion unit
in CNPC Jilin Petrochemical Company Ltd. and 30 thousand t/a CR
unit in Shanxi Synthetic Rubber Group. These projects will be
completed during 2007 - 2010.

Table 1  Major Synthetic Rubber Producers in China in 2006      
(thousand tons)
Producer                                       Output
Sinopec Beijing Yanhua Petrochemical Co.    263
Sinopec Qilu Petrochemical Co.                 206
Nantong Shenhua Co.                               200
CNPC Jilin Petrochemical Co.                       187
Sinopec Baling Petrochemical Co.                  178
Sinopec Shanghai Gaoqiao Petrochemical Co.    126
Nantong Huili Rubber Co., Ltd.                    113
Sinopec Maoming Petrochemical Co.                 73
CNPC Lanzhou Petrochemical Co.                    68
CNPC Daqing Petrochemical Co.                      61
Source: CNCIC

Table 2  Output of Major Synthetic Rubber Varieties
in China in 2006  (thousand tons)
Variety        Output    
SBR              581      
BR                446      
NBR               35     
CR                48   
IIR                39   
EPR                20      
SBS               289     
Source: CNCIC