China's chloroprene rubber may overproduce

With new or extension projects coming into operation, China’s chloroprene rubber (CR) production capacity would surpass 150 thousnd tons/year in 2015, over the world’s largest CR producer - Japan’s 105 thousand tons/year, according to latest report annouced by GIA, a global industry statistics research institution.

In that case, China may face risk of overcapacity, GIA reported.

"Because of weak demand in downstream, CR facilities has been operated half-load since 2001.", a staff in Shanxi Synthetic Rubber Group Company said.

In fact, China’s chloroprene rubber consumption didn't fluctuate in a wide range in recent years. The following chart is China’s CR apparent consumption in 2005-2010.

It is found that the consumption annual average growth rate between 2005 and 2010 was - 1.97 % in China.

On the contrary to the weak market, the total production capacity of China's chloroprene rubber was up to 83 thousand tons/year until the end of 2010, taking 20.96% of the world's production share.

GIA suggested that since the future market would be highly competitive, the project to build new facilities must be viewed with caution and the manufacturers could consider exploring the foreign markets. 

 Nowadays, the worldwide general market trend of the chloroprene rubber is that the European and American markets are shrinking, whereas  the markets in China, East Europe, Russia and South-East Asia are on the rise. Therefore, apart from competing with the imported products, China's chloroprene rubber should try to open up an outlet in North America, East Europe, Russia, East Asia and South-East Asia so that itwill defuse the pressures in the domestic market.