Accelerated expansion of the rare earth cis-butadiene rubber market

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The market for rare earth cis-polybutadiene rubber is expanding at a rapid pace. As one of the key types of synthetic rubber, rare earth neodymium-based butadiene rubber (hereinafter referred to as rare earth cis-polybutadiene rubber) boasts excellent properties such as high wear resistance, low heat generation, and good low-temperature performance. Consequently, it has become a crucial raw material for high-performance green tires and premium rubber products. Recently, China Chemical Industry News conducted an exclusive interview with Sun Baohua, deputy secretary-general of the China Synthetic Rubber Industry Association, regarding the development prospects of rare earth-containing cis-polybutadiene rubber. He believes that with the explosive growth of the new energy vehicle industry, rare earth-cured butadiene rubber is entering a period of rapid expansion in the global market. 　　Demand for high-end products is growing rapidly, and the substitution of imported products with domestic alternatives is accelerating. Rare earth styrene-butadiene rubber is produced by polymerizing styrene monomers using rare earth neodymium compounds as the main catalyst; compared to other styrene rubbers that use nickel or cobalt-based compounds as catalysts, it offers higher wear resistance, lower heat generation, and better low-temperature performance. It is particularly suitable for meeting the stringent material requirements of tires for new energy vehicles. New energy vehicles feature high starting torque, rapid acceleration, and a high overall weight, which places greater demands on the wear resistance and low rolling resistance of tire materials. Rare earth styrene-butadiene rubber has become one of the excellent raw materials for tires used in new energy vehicles. 　　In recent years, the new energy vehicle industry has seen remarkable growth. Data from the China Association of Automobile Manufacturers show that by 2025, a total of 954,000 new energy commercial vehicles will have been sold in China, representing a year-on-year increase of 65.5%. **Su Bo, Deputy Chairman of the Strategic Advisory Committee for Building a Manufacturing Powerhouse and former Vice Minister of the Ministry of Industry and Information Technology, stated at the High-Level Forum on the Development of Intelligent Electric Vehicles (2026) that this year, the penetration rate of new energy vehicles in China is expected to exceed 50%, and by 2030, it will surpass 70%. 　　“The rapid proliferation of new energy vehicles has become the core driver boosting the demand for rare earth cis-polybutadiene rubber. ”Sun Baohua said that from 2023 to 2025, the domestic market demand for rare earth-containing cis-polybutadiene rubber is expected to reach 65,000 tons, 86,000 tons, and 93,000 tons respectively, with the demand showing a year-on-year upward trend ； In downstream applications, the tire sector is driven by growing demand for tires used in new energy vehicles; its demand has risen from 46,000 tons to 73,000 tons, accounting for over 75% of the total. Apart from tires, the application of this material is gradually expanding into areas such as footwear manufacturing, high-end conveyor belts, and golf balls. The diversification of downstream applications further drives the growth of the domestic market. 　　Domestic consumption of rare earth-containing cis-polybutadiene rubber is highly concentrated in certain regions, which corresponds to the layout of the tire industry. Sun Baohua said, “The main domestic consumption areas are located in provinces that are major tire producers in China, such as Shandong, Jiangsu, Zhejiang, and Anhui.” ； Zhejiang Province, as an important domestic base for rubber product manufacturing, sees a steady increase in the demand for rare earth styrene-butadiene rubber; the demand levels for this period from 2023 to 2025 were 7,000 tons, 8,000 tons, and 9,000 tons respectively, all accounting for around 10% of the total domestic demand. ” 　　In addition to rising demand, the process of replacing imported rare earth cis-butadiene rubber with domestic alternatives has also accelerated significantly. Sun Baohua said that the \"15th Five-Year Development Plan for China’s Synthetic Rubber Industry\" issued by the China Synthetic Rubber Industry Association (hereinafter referred to as the \"Plan\") states that during the 14th Five-Year Plan period, technological innovation began to yield results: the adoption rate of continuous polymerization processes increased from 45% to 78%; the cost of the third-generation rare earth catalysts used by Jinzhou Petrochemical was reduced by 15%; Yanshan Petrochemical managed to replace imports with its long-chain branched BR9100 series; Zhejiang Transfar’s flexible production facilities saw an improvement of 40% in their ability to switch between different product grades, enabling rapid switching; and the world’s largest factory for producing rare earth-based styrene butadiene monomer was established, thereby gradually breaking the foreign technological monopoly. 　　The regional landscape shows clear differentiation, with domestic companies actively expanding overseas. The trend toward greener and more electric forms in the global automotive industry is also accelerating. In recent years, “green and low-carbon” has become a global consensus. The intensive implementation and upgrading of EU green regulations are driving up demand for new energy vehicles, while rising oil prices due to geopolitical conflicts are further accelerating the trend toward vehicle electrification. Driven by this, the global rare earth cis-butadiene rubber market is showing steady growth. 　　Sun Baohua noted that between 2023 and 2025, the global demand for rare earth styrene-butadiene rubber was 470,000 tons, 520,000 tons, and 560,000 tons respectively, with a cumulative increase of over 90,000 tons over those three years, and an annual compound growth rate of over 9%. Global rare earth styrene-butadiene rubber is primarily produced by Alunxinké. With the increase in production capacity for such rubber facilities in China in recent years, by 2025 Zhejiang Transfar’s production and sales of rare earth styrene-butadiene rubber ranked second only to Alunxinké, making it a rising star in this industry. Looking at various regions, the pattern of regional markets shows clear signs of differentiation. 　　Northeast Asia and Europe together account for about 75% of the global share, making them the key areas in the competition over production capacity and technology. It is reported that driven by both the concentration of the tire industry chain in Asia and the development of new energy vehicles, demand in this region increased from less than 170,000 tons in 2023 to 220,000 tons over three years, accounting for nearly 40% of the global total demand ； In Europe, despite the tightening of regulations regarding green tires, consumption growth has been limited due to geopolitical conflicts; demand remains stable at 170,000 to 180,000 tons, accounting for around 33% of global demand ； The American market is showing a steady upward trend, with demand rising to 56,200 tons by 2025, as the market’s potential is gradually being realized. Although the regionalization pattern of the global rare earth cis-polybutadiene rubber market is quite evident, the market continues to show a positive growth trend. Sun Baohua believes that the global market encourages domestic rubber producers to expand overseas, thereby utilizing excess domestic production capacity and alleviating the structural mismatch between supply and demand in the industry. 　　Domestic production capacity continues to expand, but the actual capacity utilization rate in 2025 remains low, as the growth rate of demand from downstream sectors has not kept up with the pace of capacity expansion. The Plan also points out that there is a concurrent situation of insufficient supply of high-end products in the industry and overcapacity in low-end areas; the self-sufficiency rate for rare earth styrene-butadiene rubber with low rolling resistance, which is used in tires for new energy vehicles, is only 65%. By 2024, the capacity utilization rate for standard grades of this material will be 75%, further exacerbating the supply-demand imbalance. 　　To alleviate the supply-demand imbalance, domestic companies are actively expanding into overseas markets to achieve a trade surplus. The plan shows that in 2023, the net import of butadiene rubber was 80,000 tons; from January to August 2025, a surplus of 39,300 tons was achieved. It is estimated that exports for the entire year of 2025 will reach 320,000 tons, representing a 14.3% increase compared to the previous year, thereby completely reversing the pattern of net imports. Furthermore, the import and export structure underwent further adjustment, with the proportion of rare earth styrene-butadiene rubber exports rising from 5% to 18% ； Imported high-performance neodymium-based products account for 65% of the total imports, mainly coming from countries such as South Korea and Japan. The international market layout has been optimized; RCEP has helped improve market access in the ASEAN region. Export destinations have diversified from relying on East Asia to countries along the Belt and Road Initiative, resulting in a significant increase in exports to Southeast Asia, the Middle East, Africa and other areas. 　　Opportunities and challenges coexist, and the development of rare earth cis-butadiene rubber is on the rise. During the 15th Five-Year Plan period, the rare earth cis-butadiene rubber industry faces both opportunities and challenges, and there is an urgent need to overcome issues such as shortcomings in core technical capabilities and equipment, as well as insufficient resilience in the industrial chain. 　　From the perspective of development opportunities, the industry holds great potential. The Plan states that, first, there is structural growth in demand downstream; the development of new energy vehicles will drive an average annual increase in demand for low-rolling-resistance tires of 8.7%, with the amount of butadiene rubber used in the tires of each new energy vehicle being 15% to 20% higher than that in traditional vehicles. Secondly, policy benefits continue to be provided; high-performance synthetic rubber projects can enjoy an 15% income tax discount as well as a 30% additional deduction for R&D expenses. The export tax rebate rate may be increased to 15%–17%, and the \"dual carbon\" policies are fostering the development of bio-based and recycled rubber. 　　At the same time, numerous challenges are also increasing the pressure on the industry's development. Firstly, breakthroughs are urgently needed in the core technologies and equipment related to rare earth cis-butadiene rubber; patents for high-performance neodymium-based catalysts are mainly held by international giants such as Lanxess and Kumho, while domestic products suffer from significant shortcomings in terms of activity and stability ； Key technologies such as the control of molecular weight distribution and long-term operation in continuous polymerization processes have not yet been fully developed, and the adoption rate of flexible production equipment is less than 30%. Second, resource and environmental constraints are intensifying; crude oil prices are expected to fluctuate widely in the medium to long term, and the supply stability of butadiene as a production raw material remains uncertain ； Furthermore, after the petrochemical industry is included in the national carbon market, the carbon emission cost per unit of product is expected to rise by 30% in 2030. As a result, 300,000 tons of outdated production capacity will face pressure to be phased out. 　　In this regard, Sun Baohua believes that the rare earth cis-butadiene rubber industry should focus on the following areas during the 15th Five-Year Plan period: first, advancing key technical projects. Carry out research on the targeted synthesis of high-performance rare earth catalysts and precise control of molecular chain structure, in order to develop products with low rolling resistance ； By 2027, overcome the synthesis and polymerization processes for bio-based butadiene, and establish an industrial facility with a capacity of 50,000 tons ； Advance the laboratory technologies for cis-1,4-polybutadiene rubber and butadiene resin rubber-plastic composite materials towards pilot testing and mass production. 　　Second, diversify the layout of export markets. Deepen operations in the Southeast Asian market, leveraging tire production capacities in countries such as Thailand and Vietnam; by 2030, increase exports to ASEAN to 45%, while expanding into the Middle East and African markets and establishing regional marketing centers ； Leveraging the Belt and Road Initiative to enter Europe’s mid-to-high-end markets, the coverage of overseas channels has reached 60%. 　　Third, develop high-end production capacity projects, with a focus on advancing the construction of rare earth styrene-butadiene rubber plants, to add 400,000 tons of high-end production capacity and strengthen the leading position in high-performance rubber for downstream applications ； Support key enterprises in establishing flexible production bases to develop a high-end product portfolio wherein neodymium-based products, modified low-cis polybutadiene, and modified solution-polymerized styrene-butadiene rubber complement each other’s advantages.