Neoprene: Supply meets demand just around the corner

Recently, many conveyor belt companies have reported that their raw material neoprene is difficult to purchase and the price is high, and companies cannot afford it. In response, Qi Runtong, secretary general of the China Synthetic Rubber Industry Association, and Xu Yaping, chairman and general manager of Chongqing Changshou Chemical Industry Co., Ltd., said in an interview that the supply and demand of neoprene in China is now basically balanced, with Changhua and Shanxi Synthetic Rubber Group as the next year. With the launch of the new neoprene project, domestic demand will be fully met, and pressures and cost pressures for raw material purchases by downstream companies will be greatly reduced.
According to Xu Yaping, this year domestic demand for neoprene is 60,000 tons, and the long-term output is about 26,000 tons, and the output of Shan rubber is about 25,000 tons. It is estimated that this year's total exports will be about 10,000 tons and imports will be about 20,000 tons, so neoprene Basic balance of supply.
Why do the conveyor belt companies feel that the purchase of neoprene is difficult due to the basic balance between supply and demand? Qi Runtong pointed out that this is mainly because the supply balance of neoprene in the international market has been broken. The major international manufacturer of neoprene, Eni Chemicals of Italy, closed its neoprene factory in Champagnier, France. The annual production capacity of the plant is 30,000 tons. DuPont Functional Elastomers Co., Ltd. cuts down the production of neoprene, which has caused worldwide Neoprene supply has changed from oversupply to demand. At the same time, many foreign companies have made orders in China, which has exacerbated the tightness of the domestic neoprene market. In addition, the domestic economic growth has driven the rapid development of the downstream rubber products industry, and the demand for neoprene has been growing. In particular, the demand for neoprene on the conveyor belt has grown rapidly. Qi Runtong said that in this situation, in order to give priority to ensuring the needs of domestic downstream users, in the case of neoprene export prices far higher than the domestic price, the only two domestic neoprene manufacturers Changhua Heshan There are no large exports.
It is understood that in order to meet domestic demand, Changhua Heshan Rubber is trying to expand product output, increase product brand, improve product quality, and stabilize product prices.
Xu Yaping said that for general-purpose neoprene, they are adopting technologies such as latex degassing and formula adjustments to further stabilize product quality and improve processing performance; the number of neoprene brands that have been discontinued or not supplied to Chinese companies abroad They are actively developing alternative products. At present, the special neoprene DCR114 and DCR213 that are suitable for the use of rubber wares with outstanding cold resistance and wear resistance are suitable for the high Mooney CR232 used in the products, and the new products such as the high Mooney graftable CR248 used for the adhesives. To meet or exceed the international level, it can completely replace imported rubber. After the downstream companies make proper adjustments to the formula, they can produce normally. These new products were quickly recognized by users after they were introduced to the market.
However, Xu Yaping also said that the cost of neoprene production companies is now under great pressure. First, the cost of raw materials for each ton of neoprene increased by 2,000 to 2,500 yuan per ton compared to last year; second, the weight-based toll on cargo transportation began on June 1. The transportation costs of raw materials and products increased; the third was land use tax. The policy adjustments such as rising prices, lower export tax rebates, and rising environmental protection costs have also increased the company's costs. However, taking into account the advantages of downstream enterprises, the survival of downstream enterprises after neoprene prices may be threatened, they are in line with the principle of cost changes and downstream business capacity, did not increase the domestic price of neoprene, but through technological transformation , process optimization, comprehensive utilization of by-products and other measures to absorb the pressure of rising costs as much as possible. From the second half of last year, the domestic price of neoprene was basically stable at 30,000 to 32,000 yuan.
It is understood that due to the current domestic production of neoprene is not enough to fully meet the demand, Changhua and Hill Oak are actively expanding production. The annual production of 30,000 tons of neoprene project jointly invested by Shanya Group and Armenia is currently under construction and is expected to be put into operation in the second half of next year. Changhua’s new 40,000 tons/year neoprene project is expected to be put into operation by the end of next year. According to Xu Yaping’s forecast, the national demand for neoprene will be 70,000 to 80,000 tons next year. After the above two projects are put into operation, they will be able to fully meet domestic demand, and pressures and cost pressures on downstream raw material procurement can be greatly reduced.

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