With the gradual improvement in Chinese butadiene rubber (BR) capacity and production as well as the product quality, its export volume has been expanding step by step and has surpassed Japan BR exports in 2022. Compared with Japan, the growth rate of China's BR export volume was 15.21% in 2022 and then increased to 55.66% in 2023.
Source: GACC, Japan Customs, OilChem
According to OilChem, Chinese BR exports have seen continuous rises in the past five years. Especially, in 2020 and 2022, the growth rate has exceeded 50.00% once. As more new units were put into production in recent years, Chinese BR production hit record highs. Influenced by export tax rebates and other related policies, China's BR resources have more prominent cost-effective advantages in Southeast Asia and India. With a significant growth trend, Chinese BR products kept the largest export volume among all synthetic rubber varieties. As of 2023, China's cumulative exports of BR have further mounted by 25.59% to 180,600 tonnes.
In the meantime, Japan's BR exports maintained at around 110,000-130,000 tonnes from 2019 to 2023. The exports have showed a downward trend since 2020, and fell to near 116,000 tonnes (the lowest point in past five years) in 2023, cut by 13.69% from 2021. In recent years, there has been no new BR unit operated in Japan, and the exports of low-price Russian goods have brought certain pressure on Japanese exports.
Source: GACC, Japan Customs, OilChem
In terms of the export destination, Japan is not the major export destination of China's BR resources, but Japan's major export destination of BR is China, mainly because there is no alternative resource for now in China for part of Japanese high-end BR grades. Thus, the technology development of mid-to-high-end BR grades still needs to be improved in China.
Vietnam and Thailand are the most important export destination countries for China, whose exports accounted for 58.28% of the total export volume, and other Southeast Asian countries accounted for 1.00%-7.00%. In recent years, the consistently increasing tyre capacity in Southeast Asia has boosted demand for BR resources. Therefore, China domestic traders need to explore markets in other Asian regions, such as Malaysia.
Marked rise in China's BR exports since 2021 has undoubtedly squeezed the proportion of Japan's BR exports to Southeast Asian countries, but Japan's exports to Italy, the United States and other countries have been relatively stable. So in terms of the exports to Europe and America, China still faces a significant gap compared with Japan.
As a whole, Japan's BR export volume may continue a downtrend as Chinese and Russian resources will further occupy the export markets. Moreover, Zeon Corporation announced plans to shut 60% of synthetic rubber production in its plant in Tokuyama, which will also affect its exports in the future.
As for China, there will be new units to be operated in H2 2024, and BR export volume will maintain at highs with the continuous improvement in production technology. Southeast Asian countries may still be the important export destination for China.
Written by Cynthia Xin, xinyue@oilchem.net
Edited by Navy Liu, liuchuanjun@mysteel.com
