China's silicone rubber industry's competitive advantage

- Mar 14, 2018-

    With the rapid increase in the demand for silicone rubber in the domestic market, China has become the world's consumer center for silicone rubber, and the major foreign countries and regions for producing silicone rubber will also increase their efforts to expand the market in China. China's neighboring countries, Japan and Russia have more than 1 million tons of silicon rubber production capacity / year, while South Korea, China's Taiwan region and Southeast Asia silicon rubber industry is also rapid development. At the same time, among the main varieties of silicone rubber in our country, the butadiene rubber (BR) has been able to meet the domestic demand. The construction of styrene butadiene rubber (SBR) unit is also accelerating. There may be surplus in the next few years. In recent years, Silicone rubber anti-dumping lawsuit filed increased, which are predicts the future competition in the domestic silicone rubber market will become increasingly fierce.

   China's silicone rubber industry has four major competitive advantages. The healthy development of the silicone rubber industry depends on constantly accelerating its own technological progress and strengthening the development of high-performance product varieties. At present, China's synthetic rubber industry's competitive advantage is:

    There is a certain core technical support. China has established a more complete product system including 7 major types of rubber products. Among them, SSBR, SBS and BR products with strong core technical support The domestic market share is higher, and according to the development of market capacity in a timely manner to expand capacity, help to further expand the market share. Products such as EPR, NBR and IIR have been introduced into the technology construction equipment. The products have successfully entered the market, and have been developed to some extent in terms of equipment capabilities and product grades, etc., and will be further expanded in the future Capacity has laid the market and technology base.

   China has a huge market demand. The investment focus of the world rubber industry has shifted to developing countries, especially to China. Our country is becoming the world's tire and rubber product manufacturing and processing base and the key area of the world silicon rubber market competition.

   Domestic natural rubber resources are not enough. China's natural rubber has been in short supply for a long time. Its import volume rose from 850,000 tons in 2000 to over 1.6 million tons in 2007, and its dependence on foreign countries has been on the rise. Increasing the proportion of silicone rubber as an important way to solve the problem of the shortage of natural rubber, some silicone rubber which can replace natural rubber partially or completely will have a bigger market.

    Butadiene and other raw materials supply sufficient. The main raw materials for the production of synthetic rubber are butadiene and styrene as well as a certain amount of isobutylene, acrylonitrile, ethylene, propylene, isoprene and chloroprene. The continuous rapid development of ethylene industry in China will provide sufficient butadiene resources for the synthetic rubber industry. With the completion and commissioning of a batch of newly built and expanded ethylene plants in China, the supply of raw material butadiene will be greatly improved. The net imports of butadiene in China will decrease from 155,000 tons in 2004 to 86,000 tons in 2007. The self-sufficiency rate increased from 82% in 2004 to 95% in 2007. The next few years, butadiene resources will no longer be the main factor restricting the development of silicone rubber. In addition, China's styrene production capacity will reach about 6 million tons / year in 2010, while the demand for the same period is about 5.8 million tons, the contradiction between supply and demand will be basically solved. From a technical or investment standpoint, resources such as isoprene and isobutene, which can be used to make silicone rubber in the by-products of ethylene plants, will gradually change in the long-term as low-cost fuels. In 2010, China's ethylene plant co-produced carbon isoprene resources in more than 300,000 tons, the comprehensive utilization of carbon five resources and the development of isoprene rubber by the industry more and more attention. The supply and demand of acrylonitrile and chloroprene raw materials will also be improved.

   Changes in the import market and downstream industries affect the development. Persistent manufacturers in neighboring countries and regions are pouring in. Surrounding China's Russia, South Korea, Japan and China's most of Taiwan's silicon rubber capacity surplus, will inevitably accelerate the influx of the domestic market. With the further opening up of the market in our country, foreign manufacturers have been given the right to distribute their products in China, and trade agencies and distribution systems can be set up directly to further reduce the circulation costs of imported products and reduce the prices of imported products. In addition, foreign investors can also rely on their higher management level and mature marketing tools to operate their products. Therefore, direct competition with the domestic manufacturers in all aspects of the market will become even more intense. Part of our plastic lack of core technology. There are still some plastic grades in our country which lack the support of their own core technologies. The expansion of production capacity of these varieties is still constrained by the high input of imported technologies and equipment, which will aggravate the investment uncertainty and increase the risks. The rubber downstream market is facing international competition pressure. In China's imports of synthetic rubber, the processing of imported materials accounts for more than 50% of the total. In recent years, India, Brazil and other developing countries, the rise of the rubber industry to China's exports of rubber products have brought tremendous pressure. Compared with foreign products, whether domestic products are competitive in terms of quality, market service, cost, etc. These are the variable factors for China to maintain the increase in the export volume of rubber products and the expansion of synthetic rubber production capacity. Adjustment of downstream industry structure will affect the development of the industry. At present, the capital structure and product structure of domestic rubber processing enterprises are undergoing major changes. Among them, the share of foreign capital holding or sole proprietorship has further increased: on the one hand, the radial tire market with high proportion of synthetic rubber used accounts for 70% of the output of foreign-funded or foreign- Wholly foreign-owned enterprises, domestic-made synthetic rubber into the foreign-controlled tire companies by the technical standards and habits and other constraints; the other hand, the traditional synthetic rubber downstream market load bearing bias tire, the product is accelerating to the whole steel Heavy duty radial tire structural adjustment, and has been extensive use of BR and SBR tread rubber, most will switch to natural rubber, is bound to aggravate the contradiction between supply and demand of natural rubber. What kind of synthetic rubber used to produce tread rubber for all-steel radial tires and how domestic synthetic rubber can continue to occupy this part of the market has become a major concern for rubber processing companies and silicone rubber production enterprises?