China's synthetic rubber development situation is not optimistic

With the development of the domestic automobile industry and tire industry entering the new normal, China's synthetic rubber industry has begun to face the situation of excess production capacity, unbalanced supply and demand of raw materials, and fierce competition in downstream demand.

Due to various factors such as the global economic environment, the domestic market, and butadiene feedstock support, the output of synthetic rubber is significantly lower than the increase in production capacity. At the same time, due to the rise of the world's natural rubber inventories and the continued decline in prices, the “golden age” for long-term excess profits in the domestic synthetic rubber industry has ended, and many new projects will face losses after they are put into operation.

Domestically designed and constructed China National Petroleum Corporation Lanzhou Petrochemical Rubber Factory produces an annual output of 50,000 tons of nitrile rubber production line
Domestically designed and constructed China National Petroleum Corporation Lanzhou Petrochemical Rubber Factory produces an annual output of 50,000 tons of nitrile rubber production line

“The structural overcapacity is a major contradiction at present, and the lower capacity utilization rate is currently the biggest problem.” Zhou Wenrong, deputy secretary-general of China Synthetic Rubber Industry Association, said, “Our main synthetic rubber equipment capacity, production volume, and consumption It is the first in the world, but the disorderly development of previous years resulted in a large proportion of ineffective production capacity and the development of homogenized products was too rapid. At the end of 2014, the main synthetic rubber production capacity was 5.18 million tons, and the annual output was less than 3 million tons. At the same time, the import volume reached around 1.26 million tons. Excessive imports of imported products led to a decline in the operating rate of the equipment year after year."

Zhou Wenrong believes that until 2020, the production capacity of the eight major domestic synthetic rubber products will be close to or even higher than the actual consumption. In addition, the import volume will be relatively large, and China's synthetic rubber products must enhance competitiveness and go global.

Faced with severe overcapacity and fierce competition in the downstream demand market, how should China's synthetic rubber industry develop?

“In general, there are two aspects. One is to improve product quality. The other is to strengthen pre-sale and after-sales service. This is the general trend of the current industry development.” Zhou Wenrong said, “Our production capacity is sufficient, and our product quality and service are Meet the requirements of downstream users."

He believes that there is no future for the development of general-purpose products under the new normal. In particular, new companies entering the industry must make careful decisions, scientifically assess their competitiveness, and prevent investment mistakes.

Zhou Wenrong also said that the existing production companies should actively carry out forward-looking and processing application research on the consumption characteristics of the downstream market, develop special brands, and use differentiated products to expand profitability.

Zhou Wenrong pointed out that the industry should focus on the improvement of the quality of domestic synthetic rubber to expand its market share, with the development of high-end new varieties, application technology development and market services as the guide, and accelerate the development of new product markets.

At the same time, it will take advantage of the inherent product advantages of synthetic rubber, take advantage of the product performance of synthetic rubber, increase the proportion of synthetic rubber used, and increase the market share of synthetic rubber in the non-tire area. The product must adapt to the needs of downstream product upgrades, increase special materials that meet the needs of green tires and can improve the quality of follow-up products; develop environmentally friendly products, implement green and clean production, save energy and reduce emissions, and meet environmental protection requirements.

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