HOW LONG WILL THE RUBBER OVERSUPPLY LAST?...NE Asia Synthetic Rubber - 2018 • Polybutadiene – NE...
Transcript of HOW LONG WILL THE RUBBER OVERSUPPLY LAST?...NE Asia Synthetic Rubber - 2018 • Polybutadiene – NE...
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HOW LONG WILL THE
RUBBER OVERSUPPLY
LAST?
PAUL BRISSONVICE PRESIDENT
C4 OLEFINS & DERIVATIVES
ARGUS MEDIA, HOUSTON
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Market Reporting
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Events
How Long Will the Rubber Oversupply LastAPIC, Kuala Lumpur, Malaysia
Paul BrissonVP – C4 Olefins & DerivativesHouston, Texas, USA21 August 2018
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London
Houston
Moscow
Singapore
Dubai
New York
Beijing
Kiev
Tokyo
Astana
Shanghai
Rio de Janeiro
Washington DC
Riga
Calgary
Brussels
Cape Town
Mexico City
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San Francisco
Sydney
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Presentation Topics
• Why is there so much synthetic rubber capacity in the world?
– Key events that triggered expansion
– Rubber expansion
– Butadiene price volatility
• Outlook - the next five years
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China and US auto light vehicle sales
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China Radial Tire Output
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Polybutadiene capacity growth
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SBR capacity growth
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China Synthetic Rubber Production
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China butadiene production
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China butadiene supply
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Global butadiene pricing
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What is the future for China’s auto industry?
• China will remain the largest auto market in the world
• #1 priority – improving air quality in major cities
– China emits more CO2 than any other country in the world
– Beijing is the most polluted city in the world
– Reducing traffic congestion in major cities
– Developing sustainable transit
– Promoting conversion to electric vehicles (EV)
• Light vehicle sales growth must slow down
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China light vehicle sales
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NE Asia drives the global butadiene market
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NE Asia butadiene capacity vs. demand
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NE Asia butadiene production vs. consumption
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NE Asia butadiene trade
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NE Asia PBR / SBR Capacity and Production
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NE Asia Synthetic Rubber - 2018
• Polybutadiene– NE Asia – 51% global capacity– NEA Asia – 56% global production– China – 29% global capacity– China – 32% global consumption – Demand growth < 2%/yr
• Styrene butadiene rubber (SBR)– NE Asia – 43% global capacity– NE Asia – 52% global production– China – 24% global capacity– China – 25% global production– Demand growth eSBR – 1.5%/yr– Demand growth sSBR – 4.5%/yr
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Conclusions
• There will be adequate capacity to produce PBR and SBR in the coming years.
• Regional growth will be focused in China. • Demand growth along the supply chain of light vehicles,
tires, synthetic in China is slowing while China shifts attention to infra structure and environmental issues.
• NE Asia will remain structurally short of butadiene.• NE Asia will remain a significant net importer of butadiene
from all other regions in the world, possibly including the US.
• The “oversupply of rubber” is a misconception – the shortage of butadiene in NE Asia is the real problem.
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