Current Location: Home > OBSERVE > Editor Observe > Page

Rubber additive price hikes due to stricter environmental supervision

Guangfa Securities has issued an analysis report on rubber additive industry, saying the environmental supervision becomes stricter, and the prices of rubber additives are expected to increase further.

Demand growth stabilizes

About 65% rubber additives are used for tire production, and the market demand depends largely on downstream tire market.

Since 2016, China’s tire output rebounded and gradually escaped the impacts of the U.S.’s anti-dumping and anti-subsidy measures against tires imported from China.

In the meantime, the car ownership in China keeps growing, the demand for tire replacement continues to increase, and the growth of tire output is likely to stabilize.

Statistics show that in the first half of 2017, China’s cover tire output totaled 484 million, up 7.7% year on year.

In the short term, the tire industry is to embrace a peak season of demand in Aug. and Sept., and the demand for rubber additives is likely to grow steadily.

Supply keeps narrowing

The output capacity of rubber additives in China concentrates in Shandong province, Tianjin municipality, and Henan province, which are within the regions to accept strengthened supervision on air pollution control.

The rubber accelerator’s output capacity in Shandong, Tianjin and Henan is more than 80% of China’s total.

The capacity deployment of antiager is comparably diffusate, but the capacity in Beijing and Shandong, which are under the supervision of environmental protection authorities, is about 34% of the country's total.

It is predictable that as the environmental supervision continues, the supply of rubber additives will decline.

In the first half of this year, China's output of rubber additives were 602,000 tons, down 3.2% year on year. The outputs of accelerators and antiagers were 208,000 tons and 197,000 tons, respectively, down 0.5% and 4.4%.

Prices likely to grow further

In the second half of this year, the environmental supervision will enhance further, additive supply will dwindle further, while downstream demand grows steadily, domestic additive supply will become tight.

In addition, some specific products, such as anti-scorcher, is of higher market concentration, and their prices are more likely to grow.

In East China, the prices of accelerator M and antiager 4020 have risen 25% and 36% from the same period of last year, and the market quotation of anti-scorcher CTP has exceeded 30,000 yuan/ton.

As strict environmental supervision continues, additive price will keep the bullish momentum.

Tireworld