Today's Topics
China’s Anti-Dumping Investigation Against Halobutyl Rubber Imported from U.S., the European Union and Singapore
Reclaimed Rubber Standards Will Come out due to Serious Pollution from Scarp Rubber
Thai Government: NR Prices Will Be Stable
Polybutadiene Unit at PetroChina Jinzhou Petrochemical Will Restart
China’s Anti-Dumping Investigation Against Halobutyl Rubber Imported from U.S., the European Union and Singapore
On August 14, 2017, the Ministry of Commerce of the People's Republic of China received a formal application for anti-dumping investigation submitted by Zhejiang Cenway New Synthetic Materials Co., Ltd. and Panjin Heyun New Materials Co., Ltd. on behalf of the domestic halobutyl rubber industry. On August 30, 2017, Chinese Ministry of Commerce released announcement No.45, deciding to launch anti-dumping investigation against the halobutyl rubber imported from United States, the European Union and Singapore.
The investigation began on August 30, 2017, and should be concluded by August 30, 2018, and could be could be prolonged to February 28, 2019 in particular cases.
As early as 2010, the first 30kt/a bromobutyl rubber line was already built. However, it hadn’t been put into industrial production for a variety of reasons. In 2012, the second halobutyl rubber line was put into operation. China’s dependence on foreign halobutyl rubber was as high as 100% before 2012. Over the past two years, both the quality of Chinese-made halobutyl rubber and downstream application promotion had made a certain breakthrough. Chinese butyl rubber producers increased the output of halobutyl rubber heading into 2017. Zhejiang Cenway New Synthetic Material, Sinopec Beijing Yanshan Company, Panjin Heyun New Material and Shandong Chambroad Petrochemicals all produced certain amount of bromobutyl rubber, but China’s dependence on foreign halobutyl rubber was still high. According to SCI, the output, import volume, apparent consumption volume and the import dependence of halobutyl rubber in 2016 was 66,000mt, 212,000mt, 278,000mt and 76% respectively.
The main exporters of the investigated product are ExxonMobil Chemical in US, ExxonMobil Chemical in UK, ARLANXEO in Belgium and ARLANXEO in Singapore, who exported about 147,000mt of halobutyl rubber to China, accounting for around 69% of the total.
The major importers of the investigated product are Qingdao Shuanghe Tejia Logistics Co., Ltd., Shandong Linglong Tire Co., Ltd., Qingdao Sino-Korea International Logistics Co., Ltd., Zhongce Rubber Group, Aeolus Tyre Co., Ltd., Qingdao FEST Logistics Co., Ltd., Triangle Tyre Co., Ltd., Prinx Chengshan (Shandong) Tire Co., Ltd and Cheng Shin Tire & Rubber (China) Co., Ltd. The nine companies imported about 69,000mt of halobutyl rubber, accounting for about 33% of the total import volume.
As shown above, there are many aspects involved in the anti-dumping investigation, which will bring about great impact on the domestic and foreign producers as well as the downstream producers.
The anti-dumping investigation will have a significant influence on the market sentiment in the short run. Now, producers are discussing whether the Anti-dumping Duties will be applied in the coming period. Some of them even believes that prices of halobutyl rubber will increase and are ready to build up stocks. However, some other producers hold that if the anti-dumping investigation application is successful, it could have a negative impact on downstream companies as China’s dependence on foreign halobutyl rubber is so high. In addition, dumping might not exist as some prices are higher than those in their domestic markets. There are so many different viewpoints of the anti-dumping investigation. SCI will continue to pay close attention to the market influence.
Reclaimed Rubber Standards Will Come out due to Serious Pollution from Scarp Rubber
At present, the amount of waste tires is growing at a speed of 8%–10% annually. “Black pollution” is getting more and more serious. Thus, six ministries like National Development and Reform Commission and Ministry of Environmental Protection jointly issue the Notice on Reorganizing Recycling Industry like Electronic Waste, Scrap Tire, Waste Plastics, Discarded Clothes and Waste Home Appliance Disassembly to promote the healthy development of the industry. Besides, standards of reclaimed rubber are under development.
Thai Government: NR Prices Will Be Stable
On August 29, the Rubber Authority of Thailand showed that the NR price in Thailand would be increasingly stable supported by the Thai Rubber Price Stabilization Fund.
According to Titus Suksaard, chairman of the Rubber Authority of Thailand, the Thai government and rubber exporters had invested 1.02 billion THB (about 204 million RMB) to co-bulid the Rubber Price Stabilization Fund. The fund was used to purchase rubber from both the spot market and the futures market. Since July, the price of RSS 3 had increased from THB 49/kg (around RMB 9.80/kg) to THB 58–60/kg (RMB 11.60–12.00/kg).
He said that the price of Thai NR latex was around THB 52/kg (RMB 10.04/kg). The Rubber Authority of Thailand planned to provide a loan of 10 billion THB (around 2 billion RMB) to NR latex producers, and producers could directly purchase the feedstock from the farmers. He thought that the price of NR latex was likely to become the benchmark price in the rubber market. He also estimated that about 100kt NR latex would be consumed supported by the loan.
The rubber price was likely to increase to THB 70/kg (around RMB 14/kg) in 2017.
The rubber price in Thailand was at a low price level for a long time, due to the import volume decline from the large importers and the suspended procurement of some investors. The price slumped to THB 36.95/kg (around RMB 7.39/kg) in January-February, 2015, hitting a record low in the past 13 years.
Improving and stabilizing the rubber prices was the main focus for Thai government and the producers. Besides the Rubber Price Stabilization Fund and the loan policy, the Thai Cabinet also passed a 1.8 billion THB budget to stimulate the rubber utilization nationwide. Thai rubber price was likely to increase and stabilize in the short term.
Polybutadiene Unit at PetroChina Jinzhou Petrochemical Will Restart
News comes that the high-cis polybutadiene (HCBR) unit at PetroChina Jinzhou Petrochemical is planned to restart. According to the news issued on the official website of PetroChina, the 30kt/a HCBR unit at PetroChina Jinzhou Petrochemical will take overhaul recently. The unit maintenance includes regular maintenance and technological upgrading. SCI learns that the unit is likely to restart in Q4, 2017.
In September 1966, PetroChina Jinzhou Petrochemical successfully produced the first piece of synthetic polybutadiene, which became the birth place of China’s polybutadiene technology. With the overheated investment in synthetic rubber industry in China in 2012, the price slump and the profit shrink led to unsustainable operation of the polybutadiene rubber unit at PetroChina Jinzhou Petrochemical. The unit was shut down for over 3 months in 2012 and around 5 months in 2013. Then the unit has been shut down since March 2014.
The unit is planned to restart in Q4, 2017. How will this influence the upstream and downstream industry chain? On the one hand, the market shares of PetroChina’s polybutadiene products are expected to increase. The supply pattern of butadiene will change greatly. However, as the supply-demand relation between the suppliers and the downstream users is relatively stable, the demand and consumption for PetroChina Jinzhou Petrochemical’s resources will be uncertain. On the other hand, the unit restart will greatly affect the upstream and downstream industry chain. The company will upgrade the products, which will ease the homogeneous competition in the nickel-catalyzed polybutadiene (NiBR) industry in PetroChina Group. The price setting, market acceptance, product quality, etc., will undergo the test from the market.
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