Under the huge impact of the tide of environmental protection nationwide in 2017, the rubber chemicals industry withstood the tough test and basically guaranteed “stable supply” with the joint efforts of the entire industry. Meanwhile, the leading company in rubber chemicals continued to do fruitful work in such aspects as technological innovation, market service and industrial distribution. 

I. Overview of the rubber chemicals Industry in China in 2017

1. Production and sale of rubber chemicals

See Table 1 for main economic data and outputs of main products in the rubber chemicals industry in 2017 and the year-on-year comparison with those in 2016. The data come from statistics of 47 key member companies collected by the China Rubber Industry Association rubber chemicals Specialized Committee.

Table 1: Main Economic Operation Condition in the rubber chemicals Industry in 2016~2017 

According to statistics by CRIA, the gross output of rubber chemicals in 2017 was 1.14 million tons, slightly increasing by 1.7% on a year-on-year basis (same below), which indicated tight supply, but stable supply was basically realized; the gross sales revenue was RMB 2.157 Million Yuan, increasing by 15%, fully demonstrating the price rise caused by the tight supply; and the gross industrial output value was RMB 2.218 Million Yuan, slightly higher than the gross sales revenue, reflecting a small amount of inventory across the industry. The volume of export rose by 2.3% and the export (volume) rate was 29.4%; the value of export rose by 15.4% and the export (value) rate was 30%. The global difference in prices of rubber chemicals was gradually diminishing.

See Chart 1~2 for the trend of annual growth of gross outputs and the trend of average price variation of the counted member companies. 2003~2014 marked a phase of rapid growth. 2015 started to witness fluctuation, though the overall trend was still on the rise. But the rise was getting reduced, which led to a phase of slight increase. This matched the development trend of the automobile and tire industries in China.

Chart 1: Trend of Annual Growth of Gross Output of rubber chemicals 

Chart 2: Average Price Variation of rubber chemicals 

Chart 2 shows the curve of average price (sales revenue/gross output) variation of the industry, which clearly reflects the market status of rubber chemicals. Before 2005, China was in a development phase when the rubber chemicals industry grew large from small. It was characterized by supply falling short of demand, and the prices of rubber chemicals went up along; later, the supply-demand relationship in rubber chemicals market started to change. A market featuring oversupply started to occur, dragging the prices down with it. Since the second half of 2016 when new laws of the state on environmental protection were introduced and implemented, under huge impact of the tide of environmental protection, the rate of operation of the rubber chemicals industry started to drop significantly in 2017, and that supply fell short of demand occurred for a short period of time. Given that the raw materials of rubber chemicals (basic chemical materials) were also impacted by the tide of environmental protection, some of them were also in short supply, such as dicyclohexylamine, tert-butylamine and m-xylylenediamine, leading to the tight supply of accelerants DZ, TBBS, PK900, etc. As a result, signs appeared that the average price was picking up.

Although the supply was relevantly tight for a short period of time in 2017, key enterprises in the rubber chemicals industry gradually resumed their normal production and ensured year-round slight growth thanks to the ending of the crude “sweeping” administrative approach of local governments in their environmental policies. Environmental policies are long-term policies of the state, which will only raise the technical indicators for heavy pollution discharging. Therefore, excellent rubber chemicals companies will definitely invest a lot in environmental protection and follow the state’s policies on environmental protection, in order to ensure favorable conditions for companies to survive and stable supply for the industry.

According to statistics on the outputs of 47 member companies, the industrial concentration ratio was close to that of 2016; calculated by sales revenue, top ten companies accounted for 65.1% of the whole industry, and top 20 companies accounted for 83.7%. Per capita sales revenue of the industry in 2017 reached RMB 1.544 Million Yuan, increasing by 27%, indicating remarkable progress made by the industry in automation and lean management of companies. The company with the highest per capita sales revenue was Sanliang Rubber and Plastic New Materials Co., Ltd. of Jiangyin City, reaching RMB 4.444 Million Yuan per person; it was followed by Red Avenue New Materials Group Co., Ltd. with per capita sales revenue reached RMB 3.388 Million Yuan per person; the companies with per capita sales revenue over RMB 2 Million Yuan also included Nanjing Shuguang Chemical Group Co., Ltd. and Nanjing Chemical Industries Co., Ltd.

Analyzing from the perspective of monthly statistics, the monthly gross outputs (see Chart 3) included in the statistics by CRIA reflected the phase during which the industry was worst impacted by environmental protection was from May to July 2017, with the output dropping by about 6%; the period from August to December saw an increase, particularly an over 10% increase in December.

Chart 3: Comparison of Monthly Outputs of rubber chemicals according to Statistics by CRIA 

Chart 4: Comparison of Monthly Sales Revenue of rubber chemicals according to Statistics by CRIA 

The output base of rubber chemicals in China was relatively large, and we already entered a stage of maturity featuring slight increase (see Chart 1). The fluctuation in monthly sales revenue was relatively slight, yet the increase became remarkable after August. It could be seen clearly from the trend of monthly average price fluctuation (see Chart 5) that the rubber chemicals price was on the rise all the way in 2017.

Chart 5: Monthly Average Price Variation of rubber chemicals in 2017 according to Statistics by CRIA 

2. Characteristics of the current situation of the rubber chemicals industry in China

China has become a major rubber chemicals producing country in the world and has made considerable progress in techniques, equipment and modern management. But a certain gap remains between developed countries and us. In 2017, environmental protection and safe production were major tests faced by companies, which was related to the lifeline of companies’ survival. Therefore, the development of China’s rubber chemicals industry requires more investment in technological innovation, process automation and innovation in lean management to raise the overall level of the industry (including development of new products, per capita output value, resource consumption, energy consumption, pollution discharge, etc.), so as to develop China into a powerful country in the rubber chemicals industry.

Table 2 shows estimated output of rubber chemicals nationwide over the years (estimated data for 2018). Among which, the increase has remarkably decreased since 2015. A slight increase was realized in 2017 owing to impact by environmental protection.

Table 2: Gross Output of rubber chemicals Nationwide from 2010 to 2018 

Ten Thousand Tons

Highlights of the development in countries with a strong rubber chemicals industry in 2017 include:

(1) Demonstrating survival capability of excellent rubber chemicals companies while undergoing impact of the tide of environmental protection

As a fine chemical industry, the rubber chemicals industry is one of the key fields of pollution discharge across the rubber industry. In 2017, under rounds of supervision and inspection by the national inspection team for environmental protection, rubber chemicals companies were universally faced with short-term halt of production or production limit, which had a huge impact upon the rate of operation across the industry. There once appeared a tough situation of tight supply. To the rubber chemicals industry, the prominent problem of the year remained to be environmental protection and safety, among which waste water disposal still required constant innovation in end-of-pipe treatment technology to ensure that discharge is up to standard; it also required promoting original process innovation in order to achieve waste water-free discharge of rubber accelerants as soon as possible. Apart from waste water, disposal of exhaust gas (odor in particular) and dangerous solid waste were also raised to a new level. The data accumulated by the rubber chemicals industry in terms of VOCs and disposal of dangerous wastes remained relatively feeble. Companies are required to properly deal with it with a positive attitude in this respect, so as to genuinely increase the overall level of environmental protection across the industry.

(2) Continuing to promote the level of automation and attaching importance to the efficacy of informatization

In 2017, the rubber chemicals industry continued to increase its level of production automation. Leading companies in the industry had two focuses: one was the transformation of old production lines, and the other was innovation in new ones. The annual per capita sales revenue in the industry reached RMB 1.54 Million Yuan, increasing by 27%, which genuinely reflected the remarkable progress made by the industry in the process and technology of automation.

The highlights in innovation in process and technology were staged achievements made through exploration and innovation in the micro reaction channel technology. Several leading companies already conducted industrial experiments, believing that the innovation of the technology will be improved and promoted in the rubber chemicals industry in the near future.

(3) Formulating the group standard of General Specifications for Pre-dispersion rubber chemicals to raise the level of standardization

Pre-dispersion rubber chemicals is a new preparation type of rubber chemicals. Thanks to their advantages of being environment-friendly during usage, easy to weigh, of good dispersiveness, energy-conserving, safe to operate, etc., they have won favor of a lot of rubber product companies. They are appearing increasingly more in the market, and so are the types of master batch rubber chemicals. However, there is currently neither a national standard nor an industrial one for the testing and inspecting methods of pre-dispersion rubber chemicals. The testing and inspecting methods vary both among manufacturers and between manufacturers and users, which has led to the discrepancy in tested data. Formulating the general specifications for pre-dispersion rubber chemicals is of positive significance for standardization as well as the orderly and sound development of the industry. It will promote the application of that type of products both at home and abroad in a better way.

In 2017, CRIA had already officially released the General Specifications for Pre-dispersion rubber chemicals (Standard No.: T/CIRA 25001-2017), which started to be formally implemented from January 1, 2018. This is the first association group standard in the rubber chemicals industry. The units that have participated in compiling the standard include: Shandong Yanggu Huatai Chemical Co., Ltd., Shandong Sunsine Chemical Co., Ltd., Willing New Materials Technology Co., Ltd., Lianyungang Lianlian Chemical Co., Ltd., Ningbo Actmix rubber chemicals Co., Ltd., Cosmos Chemicals Co., Ltd. in Zhuhai Special Economic Zone, Guangdong Duba New Materials technology Co., Ltd. and Kemai Chemical Co., Ltd.

(4) Continuing to enhance technological innovation to maintain sustainable development of the industry

CRIA has been working hard on promoting innovation in clean production technologies, setting its final goal as a “green chemical industry with rubber chemicals”. After Sennics 6PPD production became green, Nanjing Shuguang also achieved continuous automatic production; this year saw leading companies investing heavily in innovation in such fields as accelerant MBT, CBS, DMBT and TBBS and making exciting achievements in scientific research, such as the accelerant MBT clean production technology of Yanggu Huatai, the technology of turning waste water into resources of Kemai, the continuous high thermal stability IS pipeline technology of Yanggu Huatai, the industrialization of continuous technology of accelerant MBT and DMBT pipeline of Willing New Materials and innovation in the micro-chemical channel technology of Stair Chemical.

By means of spontaneous technological innovation of companies, the rubber chemicals industry has been moving toward the direction of automation and informatization, laying a solid foundation for the intelligentization in the industry.

Based on the development of the industry, the key technologies and generic technologies that remain to be resolved at present mainly include:

• Firstly, continuous R&D and promotion of clean processes

The R&D of clean production processes mainly involve: clean production process of accelerant MBT, development and promotion of the process route of oxygen oxidation and hydrogen peroxide oxidation of sulfenamide accelerants, as well as the re-innovation and promotion of the technology of continuously producing high thermal stability insoluble sulfur.

• Secondly, promotion and publicity of the industrialization of the micro-chemical reaction channel technology (innovation in equipment, process and technologies)
• Thirdly, industrialization of the pipeline continuous clean production technology (innovation in equipment, process and technologies)
• Fourthly, R&D of new products

In terms of the accelerant, the industry shall actively develop new vulcanization accelerants that do not generate nitrosamine, stop using those that generate nitrosamine, and actively develop new chemicals that are suitable for green tires and high-performance rubber products.

In terms of the anti-ager, the industry shall strengthen cooperation and communication with tire and rubber product companies, enhance development of new anti-ager and its series of products, such as high-end products including anti-ager 3100 and 4030, natural amino acids, new light-colored anti-ager, high-performance and long-acting anti-ager TAPTD, etc.

There have also been some new researches or innovative signs in terms of functional chemicals. For example, in the respect of vulcanization activator, it is likely to reduce or abandon zinc oxide.

Innovation in other new products, such as white carbon black dispersing agent, Si-69 efficiency accelerant and light-colored anti-ager.

• Fifthly, innovation in environment-friendly and super low-emission technologies

In response to the state’s increasingly higher requirements on environmental protection like the super low-emission standard, CRIA rubber chemicals Specialized Committee has been actively seeking for excellent companies in the environment-protection industry and getting them to pay attention to and participate in constantly increasing the environment-protecting level of the rubber chemicals industry. For example, many companies like Sunsine Chemical contacted with ZXTY Environmental Technology Co., Ltd., reaching the letter of intent for cooperation in the Claus kiln technology of H2S waste gas treatment plus the advanced catalytic desulfurization and denitration technology, giving rubber chemicals companies technological support in achieving super-low emission of waste gas.

(5) Constantly increase the industrial concentration ratio to create world-known brands

CRIA has long been encouraging the leading companies in the industry to move toward comprehensive development involving diversified types of products while regarding anti-ager and accelerant as their main products. By means of scientific merging and restructuring as well as effective sales network, they can constantly expand their own market shares, improve their company brands, and strive for securing five to six world-class brands. According to the current development trend, the promising companies remain to include: Shandong Sunsine Chemical Co., Ltd., Jiangsu Sennics Co., Ltd., Kemai Chemical Co., Ltd., Shandong Yanggu Huatai Chemical Co., Ltd., Willing New Materials Technology Co., Ltd., Shandong Stair Chemical & Technology Co., Ltd., etc.

By the end of the “13th Five-Year Plan”, the specific goals of the industry are: There are more than five companies with sales revenue above RMB Two Billion Yuan, more than eight companies with sales revenue above RMB One Billion Yuan, and the market share of top ten companies reaches over 80%.

Apart from technological innovation, what is more important to strengthen the rubber chemicals industry lies in management innovation. So it is necessary to guide and push companies to invest more in management innovation, promote advanced management model such as the lean management model and Dupont safety management model, and carry forward the process of company informationization step by step.

II. Outlook of the Development Trend of the rubber chemicals Industry in 2018

The biggest difficulty facing the rubber chemicals industry in 2018 remains the impact of the tide of environmental protection. Under such environmental policy, companies will need more time to increase production. The tight supply will not be effectively resolved in a short period of time. Moreover, as the technological standard and environmental protection costs of the industry rise, the prices of rubber chemicals will pick up to a reasonable range.

Based on the development trends of China’s automobile, tire and other rubber product industries, it is predicted that, in 2018, the gross output of rubber chemicals nationwide will reach 1.28 million tons, rising by 4.9%; and the output of members of the association will reach 1.20 million tons, rising by 5.3%.