Rubber Journal Asia Synthetic Rubber
An elastic growth for synthetic rubber Nevertheless, ESBR grades still account for about 76% of total world capacity as of 2015. However, as most new SBR capacity additions today are based on the solution SBR process, the ESBR share will likely decrease to about 72% by the end of the forecasted period in 2020. The tyre industry is the dominant consumer of SBR, accounting for more than 75-80% of total demand in 2015. Apart from this, SBR is also used in non-tyre automotive applications, such as conveyor belts, industrial hoses, various moulded and extruded rubber goods, footwear, and other consumer goods. Some grades of SBR, those that are waterproof and free from impurities, are also utilised in the cable industry.
The oil price decline and weakened economies may be nocuous for a number of sectors, but not for the synthetic rubber sector, which is due for further expansion in the coming years, say Angelica Buan and Elaine Cotoner in this report.
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he declining price of oil is a windfall for most sectors. For consumers, the price drop improves their purchasing power, to say the least. At the US$30 per barrel mark for the price of crude oil, with expectations of further price declines, it could translate to lower costs for goods, energy and transportation, and narrowed-down inflation, to cite a few basic benefits. The International Monetary Fund says that a mere 10% adjustment in the oil price corresponds to some 0.2% change in global GDP. However, certain industries are dependent on oil, plus the dull sentiments of major oil producers affected by the low oil prices and further exacerbated by weakened demands from China, Japan, Europe, and the US, are all not a big help to the industry. On the other hand, the decline of oil prices is making fuel-based products more lucrative for manufacturers relying on the commodity. Synthetic rubber (SR), which is a crude oil by-product, is now favoured by tyre and non-tyre segment manufacturers, now that prices of SR are declining. In the second quarter of 2015, it was reported that synthetic rubber prices slid by 15% in Europe and 5% in the US, compared to the same period the previous year. This resulted in an increasing usage of SR. In Europe, for example, utilisation climbed to a ratio of 60% for synthetic rubber versus 40% for natural rubber. This trend is seen to continue, along the still unabated drop in oil prices worldwide.
“Styrene butadiene elastomers constitute the largest volumes of synthetic rubber in the world…” Even though China remains the largest consumer of ESBR, it has exhibited only a comparatively small average annual growth of about 0.6% since 2010. The largest demand growth on a percentage basis was registered in South Korea (6.5%), Taiwan (6.4%), Canada (4.4%), Japan (4.3%), and Africa (4.1%). Decreasing consumption of ESBR was seen in most of the mature markets: the US, Mexico, Western Europe, and the CIS/Baltic states. Overall, the major consuming regions in 2015 were China (accounting for about 29% of global consumption), the US (14%), Southeast Asia, and South America. By far the largest capacity additions have been seen in Southeast Asia (Singapore and Thailand), South Korea, and China, which together accounted for about 64% of the total increase. With a comparatively large average annual growth rate of about 18.5% annually registered for domestic demand in the last five years, China has become by far the largest consumer of solution SBR, surpassing Western Europe and Japan, and is assumed to account for about 24% of the global demand in 2015. Only demand in Taiwan and the CIS/Baltic states has increased at even higher annual rates (27% and 23%, respectively), while declining consumption levels were seen in Mexico and Japan.
SBRs make the cut tyrene butadiene elastomers (SBRs) constitute the largest volumes of synthetic rubber in the world, according to a report by US research house IHS. There are two major types of SBR: emulsion and solution. Emulsion SBR (ESBR) is continuing to lose ground to solution SBR (SSBR), which is better suited to meet the increasingly stringent specifications of high-performance tyres.
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