GIA: Future Neoprene Capacity in China May Surplus

On November 30, 2011, GIA, the latest global industrial data analysis and research organization, released a report saying that due to the increasing demand for industrial rubber products and adhesives, the demand for global neoprene rubber will exceed 440,000 tons in 2017, and the Asia Pacific region will become In the world's fastest growing market for the neoprene market, by 2017, the average annual growth rate will be above 3%.

World Market Analysis: Slow Growth in Global Production Asia-Pacific Consumers Have Occupied Half of the World Since the DuPont Co. started industrial production of neoprene using the bulk polymerization process in 1931, the production of neoprene in the world reached a peak in the 1980s, and production capacity was once reached. About 800,000 tons/year. However, from the 1990s until 2005, due to higher product prices, neoprene was gradually replaced by ethylene propylene rubber and other products, and the world's demand generally showed a downward trend. This alternative trend is particularly evident in auto parts where neoprene consumption accounts for about 20% of global neoprene consumption.

After 2005, with the rapid development of the automobile and real estate industries in emerging countries such as China, the demand for chloroprene rubber in the Asia Pacific region began to increase, but the growth rate was limited, and consumption in Western Europe and North America was slow. Downward trend. In 2010, the world's consumption of neoprene was about 290,000 tons. Among them, consumption in Western Europe accounts for approximately 23.1% of total world consumption, consumption in North America accounts for approximately 20.5%, consumption in the Asia-Pacific region accounts for approximately 49.0%, and consumption in other countries and regions in the world accounts for approximately 7.4%.

In recent years, the same slow growth as the demand is the global production of neoprene. The output in 2005 was about 287,000 tons, about 294,000 tons in 2008 and about 300,000 tons in 2010. Compared with the peak, after the 1990s, some factories in Western Europe and the United States have stopped production or reduced their production capacity. As of 2010, the United States, Japan, Germany, China, and Armenia had a total of nearly 10 devices producing chloroprene rubber in 5 countries, with a total production capacity of 396,000 tons (excluding the production capacity of neoprene rubber latex, the same below), a year-on-year increase. 8.20%. Among them, Europe's production capacity is 100,000 tons/year, accounting for approximately 25.25% of the world's total production capacity; North America's production capacity is 100,000 tons/year, accounting for approximately 25.25% of the world's total production capacity; production in the Asia Pacific region The capacity is 188,000 tons/year, accounting for approximately 47.47% of the world's total production capacity; Armenia's production capacity is 0.8 million tons/year, accounting for approximately 2.02% of the world's total production capacity.

Germany, the United States, Japan, and China are the world's leading countries and regions for the production of neoprene, with a total production capacity of 388,000 tons/year, accounting for 97.98% of the world's total production capacity. Among them, Japan is the world’s largest producer of neoprene, with a production capacity of 105,000 tons/year, accounting for approximately 26.51% of the world’s total production capacity; followed by Germany and the United States, with a production capacity of 100,000 tons/year. It accounts for 25.25% of the world's total production capacity. Once again, China has a production capacity of 83,000 tons/year, accounting for 20.96% of the world's total production capacity. As far as the production process is concerned, the production capacity of the acetylene method is 146,000 tons/year, accounting for approximately 36.87% of the total production capacity of the world; the production capacity of the butadiene method is 250,000 tons/year, accounting for approximately the world's total production. 63.13% of capacity.

In the next few years, with the expansion of LANXESS Chemical's neoprene plant in Dormagen, Germany, and the expansion of several units in China, it is expected that by 2015, the total production capacity of the world's neoprene will reach approximately 50 Ten thousand tons.

Analysis of China's Market: Steady Consumption of Quantity Planned Capacity Doubled In recent years, the overall consumption of neoprene in China has not changed significantly. In 2005, the apparent consumption of China's neoprene was 67,600 tons. In 2007, it decreased to 6600 tons, and in 2009 it further decreased to 56,100 tons. In 2010, it rebounded to 61,300 tons, an increase of approximately 9.27% ​​over the same period of last year. From 2005 to 2010, the annual growth rate of consumption is about -1.97%.

Adhesives for footwear and construction are the largest application areas of China's neoprene, accounting for about 60% of total consumption; followed by industrial rubber products, accounting for about 30% of total consumption; and about 10% for Wire and cable and other fields. In terms of geographical distribution, South China and East China consume the most, accounting for about 65% of the country's total consumption; North and Central China account for about 25%; other regions account for about 10%.

As the global economy is still in a recession, the growth rate of China's related industries will also slow down. Together with the substitution of EPDM rubber and other products, the domestic demand for neoprene will not increase much. It is estimated that by 2015, the total consumption of China's neoprene will be only 70 to 75 thousand tons. The slow growth in consumer demand, then the corresponding production market situation?

China's research and development of neoprene began in the 1950s. The Changchun Institute of Applied Chemistry, Chinese Academy of Sciences first carried out the research on the synthesis of chloroprene rubber by acetylene carbide method. In the year of 1953, it built a 450kg/month experimental device in Changchun. In 1956, Chongqing Changshou Chemical Factory adopted the above-mentioned scientific research achievements and the technology of the former Soviet Union and built it. 2000 tons/year production plant, put into production in 1958; from 1965 to 1966, China successively built calcium carbide acetylene production plant in Shanxi Synthetic Rubber Group and Qingdao Chemical Plant in Shandong, with a production capacity of 2500 tons/year and electrolytes for post-processing. Cohesion technology; In 1987, the above three plants successively introduced frozen coalescing technology and carried out reconstruction and expansion of the plant. After the expansion of Qingdao Chemical Plant, the production capacity reached 10,000 tons/year, but it ceased production and transformation in the late 1990s; 2007 In 2011, Shanxi Synthetic Rubber Group Co., Ltd. and Armenia Erit Company started a joint venture to build an annual production capacity of 30,000 tons/year of neoprene rubber production equipment. After several years of efforts, the equipment was completed and put into operation in December 2009.

As of the end of 2010, China's total production capacity of neoprene reached 83,000 tons, accounting for 20.96% of the total production capacity of the world's neoprene. Among them, Shanxi Synthetic Rubber Group's production capacity is 55,000 tons / year, accounting for about 66.27% of the total production capacity; Chongqing Changshou Chemical's production capacity is 28,000 tons / year, accounting for about 33.73% of the total production capacity.

In the coming years, there will still be manufacturers in China that plan to build or expand neoprene production facilities. Among them, Chongqing Changshou Chemical Co., Ltd. plans to build a new 40,000-ton/year production plant, Sichuan Changning (the planned production capacity of the plant is 50 million tons/year), Dongying Port Economic Development Zone (the planned production capacity of the plant is 50,000 tons/year) and Inner Mongolia Lantai Industrial Co., Ltd. (with a planned production capacity of 20,000 tons/year) is also planning to build a new production facility for chloroprene rubber. It is estimated that by 2015, the total annual production capacity of China's neoprene will exceed 150,000 tons.

Import and export market analysis: Anti-dumping will continue to implement domestic competition to ease China's neoprene production can not meet the actual domestic demand, and therefore need to be imported every year.

In 2005, the self-sufficiency rate of China's neoprene was 62.13%, and the import volume was 25,600 tons (the number of imports and exports did not include neoprene latex products, the same below); in 2007, the self-sufficiency rate was 78.79% and the import volume was 23,500 tons. In 2009, the import volume was 19,000 tons, a year-on-year decrease of approximately 18.45%; in 2010, the import of China's neoprene was 24,700 tons, an increase of approximately 30%; the import volume from January to August 2011 was 14,700 tons , year-on-year decrease of approximately 10.91%. Among them, the import volume of primary shape chloroprene rubber was 12,000 tons, accounting for 81.63% of the total import volume, which was a decrease of 12.41% year-on-year; the import volume of neoprene rubber sheet, sheet, and tape was 0.27 million tons, accounting for the total import volume. The amount of 18.37% decreased by approximately 3.57% year-on-year.

The reduction in imports is not unrelated to the collection of anti-dumping duties. In May 2005, China began to impose anti-dumping duties on imports of neoprene rubber originating in Japan, the United States, and the European Union. The deadline is five years. This anti-dumping protection measures have led to a relative reduction in the volume of imported goods in the domestic market over the past few years, and prices have been far higher than domestic products. The influencing factors in the domestic market are mainly concentrated on the pricing policies of domestic enterprises and the state of equipment start-up.

On May 9, 2010, the company applied for the domestic neoprene rubber industry, and the Ministry of Commerce announced that an anti-dumping measure applicable to imports of chloroprene rubber originating in Japan, the United States, and the European Union should be reviewed. After investigation, the Ministry of Commerce believes that if the original anti-dumping measures are terminated, the damage to China's domestic neoprene industry may occur again. Therefore, in accordance with Article 50 of the Anti-Dumping Regulations of the People's Republic of China and the Decision of the Customs Tariff Commission of the State Council, the Ministry of Commerce decided to continue to implement imported chloroprene rubber originating in Japan, the United States, and the European Union starting May 10, 2011. Anti-dumping measures with a period of 5 years. This measure will, to some extent, reduce imports and ease the pressure on domestic competition.

China's imports of neoprene mainly come from China's Taiwan, Japan, and Germany. Since 2010, imports from these three regions totaled 24,501.11 tons, which accounted for about 99.31% of total imports of neoprene. Among them, imports from Japan amounted to 21839.74 tons, accounting for about 88.54% of total imports; imports from Germany amounted to 2343.74 tons, accounting for about 9.46% of total imports; imports from Taiwan, China amounted to 326.63 tons, accounting for about 1.32% of total imports.

From a variety point of view, the imports of primary-shaped neoprene rubber come mainly from Japan and Germany, and the imports account for approximately 89.68% and 9.00% of the total imports of primary-shaped neoprene; the main sources of neoprene plates, sheets, and strips are also In Japan and Germany, imports accounted for 82.88% and 11.77% of the total imports of neoprene rubber sheets, sheets and tapes, respectively.

At the same time as imports, China's neoprene also has a small amount of exports. In 2005, the export volume was 0.10 million tons; in 2007, the export volume was 0.95 million tons; in 2009, the export volume was 0.27 million tons, which was a decrease of about 62.50% year-on-year; the export volume in 2010 was 0.42 million tons, an increase of about 55.55% year-on-year. From January to August 2011, the export volume was 0.55 million tons, an increase of approximately 56.36% year-on-year. Among them, the export volume of primary-shaped neoprene rubber was 0.54 million tons, accounting for about 98.18% of the total export volume, which was an increase of 55.55% over the same period of last year; the export volume of neoprene rubber sheet, sheet and tape was 0.01 million tons, accounting for about the total export volume. The amount of 1.82%, an increase of about 33.91%.

Future market analysis: China's production capacity or surplus will actively explore emerging markets Despite the emergence of alternatives such as ethylene propylene rubber, alternative products can only replace part of the performance, can not replace the full performance of neoprene, such as ethylene propylene rubber can replace neoprene Rubber is used as an anti-aging agent, but it cannot replace the use of neoprene rubber as an adhesive. Therefore, the production and consumption of chloroprene rubber will continue to exist.

At present, the production of chloroprene rubber mainly uses the acetylene and butadiene production processes. In the longer term, these two methods will continue to exist, but the butadiene method is the future development trend. At present, the production process of China's chloroprene rubber is still relatively backward, and all adopt the calcium carbide acetylene process. Compared with Japan's electrochemistry, which is the same as the calcium carbide acetylene method, in terms of material consumption and energy consumption, safety production, environmental pollution, and variety quality, etc. , in a significantly backward state, only the consumption of calcium carbide is about 1/3 higher than the latter, and it is less competitive in the international market. Therefore, in terms of production processes, Chinese manufacturers should actively develop butadiene-butadiene-based neoprene rubber production technology in addition to continuing to improve the acetylene production process technology in order to improve the overall technological level of China's neoprene rubber.

In terms of products, the variety of neoprene rubber is the most widely used grade in synthetic rubber. However, at present, there are only a few brands of domestic neoprene rubber, and most of them are middle- and low-grade products, while foreign manufacturers generally have multiple brand names, and they are cold-resistant, heat-resistant, cohesive, and easy-to-process (including For pre-crosslinked microgels and diversified varieties of rubber latex, there is still a large gap between China and the vast majority of domestic high-end products that rely on imports.

After years of development, the production capacity of China's chloroprene rubber has reached 83,000 tons. With the addition of new construction or expansion in the future, there will be an excess of production capacity. The staff of Shanxi Synthetic Rubber Group stated that since 2001, due to the weak downstream demand, the company’s installations are all operating at half load. Professionals believe that the future competition will be more intense, and new installations should be prudent, and relevant manufacturers may consider opening up foreign markets.

At present, the general trend of development of the world's neoprene is that the European and American markets are shrinking, and China, Eastern Europe, Russia, and Southeast Asia are in an ascending stage. Therefore, in addition to competition with imported products in the domestic market in the future, China's neoprene can be gradually opened up in North America, Eastern Europe, Russia, East Asia and Southeast Asia in order to defuse the competitive pressure in the domestic market and ensure a steady and healthy development of the neoprene rubber market.

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