Current status and market prospects of butyl rubber production at home and abroad

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Current Status and Market Prospects of Butyl Rubber Production at Home and Abroad Li Ming, Wu Xiaoming (Beijing Jiangning Chemical Technology Research Institute, 100076) Abstract: Currently, the global total production capacity for butyl rubber is approximately 892 kt/a, while the total consumption in 2003 was around 747 kt/a. The total consumption is expected to exceed 800 kt/a by 2006. At present, China’s total production capacity for butyl rubber is 30 kt/a. In 2003, the production volume was 27 kt/a, while consumption was around 100 kt/a; thus, demand exceeds supply, and large amounts of rubber must be imported each year. It is estimated that the consumption of butyl rubber will reach approximately 140 kt/a by 2005, and 210 kt/a by 2010. Based on the current production status and existing problems of butyl rubber in China, suggestions for its production development are put forward. Keywords: Butyl rubber, production, consumption, market prospects. Butyl rubber (abbreviated as IIR) is the fourth most widely used synthetic rubber in the world. It is produced through the cationic polymerization of isobutylene and isoprene using a Friedel-Crafts catalyst. It appears as white or pale yellow crystals, is odorless and tasteless, has a very low glass transition temperature, and is insoluble in ethanol and propane. Due to its excellent airtightness and good resistance to heat, aging, acids and alkalis, ozone, solvents, as well as its electrical insulation properties, shock absorption capabilities, and low water absorption, butyl rubber is widely used in applications such as inner tubes, swim rings, vulcanized capsules, airtight layers, tire sidewalls, wires and cables, waterproof building materials, shock absorption materials, medicinal stoppers, food products (gum bases), rubber dams, gas protection equipment, adhesives, inner tube valves, corrosion-resistant products, wharf and ship fenders, bridge bearing pads, and heat-resistant conveyor belts. The production of butyl rubber began in the 1940s, with Exxon achieving industrial-scale production of butyl rubber at its plant in Baton Rouge, USA, in 1943. In 1944, the Canadian company Polysar built a butyl rubber production facility in Sarnia using American technology. After 1959, France, the United Kingdom, and Japan also began producing butyl rubber. In 1991, Bayer acquired Polysar’s entire synthetic rubber business, while Exxon purchased the butyl rubber production facilities in France; from then on, the production of butyl rubber worldwide was essentially monopolized by these two companies, Exxon and Bayer. In 1982, the former Soviet Union built the world’s only production facility for solution-polymerized butyl rubber in Tolyatti; the polymerization reactor used there was developed through a collaboration between the Soviet Research Institute of Synthetic Rubber and the Italian company PI. Hydrogenated butyl rubber (HIIR) can be divided into two main categories: chlorinated butyl rubber (CIIR) and brominated butyl rubber (BIIR). It is obtained by reacting butyl rubber with chlorine or bromine in aliphatic hydrocarbon solvents. Its industrial production began at the end of the 1950s; Exxon Company started manufacturing chlorinated butyl rubber at its plant in Baton Rouge in 1960, while Polysar Company began producing brominated butyl rubber in 1971. At present, only four countries in the world – the United States, Germany, Russia, and Italy – possess the technology for producing butyl rubber. In the international market, Exxon and Bayer hold a monopoly on butyl rubber products; their production capacity accounts for about 80% of the world’s total production capacity. Additionally, these two companies are also at the forefront of developing new products and technologies. At present, there is only one manufacturing enterprise in China for synthetic rubber, namely the Synthetic Rubber Plant of Sinopec Yanshan Petrochemical Company. Its production capacity is not sufficient to meet the domestic demand, resulting in large-scale imports each year; therefore, there are broad prospects for its development and utilization. 1 Current Status and Market Prospects of World Butyl Rubber Production 1.1 Current Production Status At present, Exxon in the United States and Bayer in Germany hold an absolute leading position in the world regarding butyl rubber production technology and the ability to develop new products; they do not transfer such technology abroad, and it is only these two companies that possess the technology and production facilities for halogenated butyl rubber. In 2004, worldwide there were 12 units in 9** locations that produced butyl rubber, with a total production capacity of 892 kt/a. Of this, the production capacity in North America was 393 kt/a, accounting for 44.1% of the world’s total butyl rubber production capacity ； Europe’s production capacity is 264 kt/a, accounting for 29.6% of the world’s total production capacity ； The production capacity in the Asia-Pacific region is 145 kt/a, accounting for 16.3% of the world’s total production capacity ； The production capacity in Central Europe and the CIS is 90 kt/a, accounting for 10.1% of the world’s total production capacity. Among them, Exxon’s total production capacity for butyl rubber is 459 kt/a, accounting for 51.5% of the world’s total butyl rubber production capacity ； Bayer’s total production capacity is 255 kt/a, accounting for 28.6% of the world’s total production capacity. Among the existing butyl rubber production facilities worldwide, 6 units utilize Exxon’s patented technology, 3 of which are capable of producing halogenated butyl rubber as well ； There are 2 sets of units utilizing Bayer’s production technology, both of which can produce butyl rubber and halogenated butyl rubber ； Russia’s 2 sets of butyl rubber plants, and the 1 set each in Romania and China, can currently only produce butyl rubber. The production figures of global butyl rubber manufacturers in 2004 are shown in Table 1. Table 1: Production capacities of global butyl rubber manufacturers in 2004, in kt/a. Company Name, Production Capacity, Main Products: ExxonMobil Chemical Company (USA), Bayer Rubber Company (Canada), Bayer Rubber Company (Belgium), Socabu Company (France); 1) ExxonMobil Chemical Company (UK), Nippon Butyl Company; 2) V/O Raznoimport (Russia), Pitesti (Romania), Yanshan Petrochemical Company of Sinopec (China). 25, 31, 40, 115, 556, 931, 158, 5530. IIR, CIIR, BIIR; IIR, CIIR, BIIR; IIR, CIIR, BIIR; IIR, CIIR, BIIR; IIR, CIIR, BIIR; IIR, CIIR, BIIR. Note: 1) 100% owned by Exxon ； 2) 50% is owned by Exxon, and the other 50% is owned by JSR. 1.2 Current Consumption Situation and Market Prospects The development of the automotive industry, along with increasing demands for vehicle safety and comfort, has accelerated technological progress in the radialization of automobile tires as well as the development of tubeless tires. Over the past few years, the total global consumption of butyl rubber has shown a steady upward trend, with an annual growth rate remaining around 2%. Demand has increased over the past two years, with an average annual growth rate of around 5%. In 2003, the total global consumption of butyl rubber was approximately 747 kt/year, of which the consumption of halogenated butyl rubber was about 500 kt/year, accounting for roughly 66.9% of the total butyl rubber consumption. It is estimated that by 2006, the total global consumption of butyl rubber will exceed 800 kt/a, with halogenated butyl rubber accounting for more than 70% of this amount. The world consumption of butyl rubber from 1996 to 2003 is shown in Table 2. Table 2 World consumption of butyl rubber from 1996 to 2003, in kt/a. Years: 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003. Total consumption: IIR, HIIR, HIIR. Percentage share: 58, 32, 43, 34, 05, 83, 59, 24, 03, 52, 59, 60, 82, 43, 36, 56, 00, 62, 04, 67, 24, 74, 30, 63, 57, 11, 24, 64, 65, 65, 47, 24, 75, 00, 66, 9. From 1993 to 1998, the average annual growth rate of butyl rubber consumption in the United States was 4.2%, while from 1998 to 2002 it was 1.5%. In 2002, the total consumption of butyl rubber in the U.S. was 202 kt/a, of which 182 kt/a was produced domestically, 67 kt/a was imported, and 47 kt/a was exported. Approximately 80% of this product was used in the production of tires, hoses, and tire-related products; 9% was used in the manufacture of automotive parts; 6% was used in the production of adhesives, sealants, and caulks; 4% was used in the pharmaceutical industry; and 1% was used in other industries (mainly electrical insulation, various linings, chewing gum, and roof waterproofing materials). Among them, halogenated butyl rubber is mainly used in the production of tubeless tires, accounting for about 60% of the total consumption of butyl rubber. It is expected that in the coming years, consumption of butyl rubber in the United States will increase at an average annual rate of around 1.5%, with total consumption reaching approximately 220 kt/a by 2006. The supply and demand situation of butyl rubber in the United States in recent years is shown in Table 3. Table 3: Supply and demand balance of butyl rubber in the United States in recent years, in kt/a. Year: Production, Imports, Exports, Apparent Consumption. 1998, 1999, 2000, 2001, 2002: 161, 163, 177, 180, 182; 70, 75, 75, 65, 67; 43, 45, 57, 48, 47; 188, 193, 195, 197, 202. The average annual growth rate of butyl rubber consumption in Western Europe from 1997 to 2002 was approximately 4.8%. In 2002, the total consumption was 222 kt/a, of which 236 kt/a was produced domestically, 19 kt/a was imported, and 33 kt/a was exported. 86.7% of this product was used in the production of tires, hoses, and tire-related products; 5.2% was used in the manufacture of automotive parts; and 8.1% was used in other applications, including adhesives, sealants, electrical insulation materials, various linings, chewing gum, and roof waterproofing materials. The tire industry is the main consumer of butyl rubber in Western Europe, with France being the country where the most butyl rubber is consumed – its consumption accounts for about 37% of the total butyl rubber consumption in Western Europe. Germany comes next, with its consumption accounting for around 27% of the total consumption in Western Europe. The growth in the consumption of Western European butyl rubber depends primarily on the development of the automotive industry, especially on the direction and pace of development of the major automobile manufacturers. It is expected that the growth rate of western European demand for butyl rubber will not be high in the coming years, with total consumption reaching around 230 kt/a by 2006. The supply and demand situation of butyl rubber in Western Europe in recent years is shown in Table 4. Table 4: Supply and demand balance of butyl rubber in Western Europe in recent years, in kt/a. Year: Production, Imports, Exports, Apparent Consumption. 1998, 1999, 2000, 2001, 2002, 1902, 2122, 2322, 2423, 640; 1716, 1819, 27, 33, 31, 32, 33, 203, 205, 208, 210, 222. Due to the Asian financial crisis, consumption of butyl rubber in Japan declined during 1997–1998, reaching its lowest level in 1998 at 44 kt/a. Thereafter, consumption increased rapidly; the average annual growth rate for butyl rubber consumption in Japan from 1998 to 2002 was approximately 13.9%. In 2002, the total consumption was 67 kt/a, of which 72 kt/a was produced domestically, 29 kt/a was imported, and 34 kt/a was exported. Approximately 82.8% of this product was used in the production of tires, hoses, and tire-related products, 10.9% was used in the manufacture of industrial products such as adhesives, sealants, and pharmaceuticals, and 6.3% was used in other areas (including electrical insulation, various linings, chewing gum, and roof waterproofing materials). In recent years, due to the widespread use of tubeless tires, tubeless tires in Japan account for 95% of the total tire market there. As a result, consumption of halogenated butyl rubber has been increasing steadily; currently, Japan’s consumption of halogenated butyl rubber accounts for about 70% of the total consumption of butyl rubber. It is estimated that by 2006, Japan’s total consumption of butyl rubber will reach around 70 kt/a. 2 Current Status of Butyl Rubber Production and Market Prospects in China 2.1 Current Production Status Research and development of butyl rubber in China began in the 1960s, with pilot-scale production facilities being established; however, these activities were halted for various reasons. In 1999, the Synthetic Rubber Plant of Beijing Yanshan Petrochemical Company adopted technology from the Italian company PI to build China’s only 30 kt/a butyl rubber production facility to date. This equipment is capable of producing ordinary butyl rubber products of three grades: IIR1751, IIR1751F, and IIR0745. Among these, IIR1751 is a grade suitable for use in tire inner tubes; it features moderate unsaturation and high Mooney viscosity, and is equivalent to Exxon’s 268, Bayer’s 301, and Russia’s BK1675N product grades. It is primarily used in the manufacture of tire inner tubes, vulcanized capsules, and other related products ； IR1751F is a food and pharmaceutical-grade material with moderate unsaturation and high Guayule viscosity; it can be used in the production of gum bases as well as medical stoppers ； IIR0745 is an insulating material, sealing material, and film-grade product with extremely low unsaturation and low Mooney viscosity; it is primarily used in the production of electrical insulation layers and cable terminal films. During the first two years, due to issues related to technology and equipment, it was difficult for this device to operate continuously and stably; its operational rate was low, the quality of the products was poor, and there were high levels of consumption of raw materials, energy, as well as elevated costs. The production in 2000 and 2001 was only 4.055 kt and 4.190 kt respectively. After nearly two years of technical efforts, the operating conditions of the production facility have improved significantly, with output increasing year by year. In 2002, the output reached 21.545 kt, and the quality rate of the products was 84.7%; in 2003, the output increased further to 27 kt, with the product quality rate reaching 95.4%. 2.2 Import and Export Situation: As China’s current production capacity and output of butyl rubber are not sufficient to meet actual demand, imports are necessary every year, with the volume of imports continuing to increase. In 1998, China’s total imports of butyl rubber were only 26.869 kt; this figure rose to 83.475 kt in 2003, representing a 50.7% increase compared to 2002. The average annual growth rate of imports from 1998 to 2003 was as high as 25.4%. Of the total imports in 2003, the import volume of conventional butyl rubber was 42.986 kt, representing a year-on-year increase of 36.5% ； The import volume of brominated butyl rubber was 40.489 kt, a year-on-year increase of 69.0%. Among them, the import volume of the primary form, ordinary butyl rubber, was 35.168 kt, representing a year-on-year increase of 49.8% ； The import volume of primary halogenated butyl rubber was 26.942 kt, representing a year-on-year increase of 72.4%. In the first half of 2004, 44.292 kt of butyl rubber was imported, representing a year-on-year increase of 8.3%. Among them, the import volume of primary butyl rubber was 10.784 kt, and the import volume of primary halogenated butyl rubber was 16.490 kt. In recent years, the import and export situation of butyl rubber in our country is shown in Table 5. Table 5: Import and Export Situation of Butyl Rubber in China in Recent Years (in kt)
Year | Butyl Rubber | Halogenated Butyl Rubber | Total Imports | Total Exports | Imports | Exports | Imports | Exports | Imports | Exports
1998 | | | 20.99 | 42.32 | 25.22 | 32.54 | 13.14 | 84.29 | 61.93 | 90.21
2000 | | | 20.02 | 22.66 | 26.86 | 93.09 | 83.92 | 645.11 | 155.44 | 983.47
2001 | | | 20.53 | 73.09 | 56.97 | 316.86 | 195.70 | 239.62 | 240.48 | 90.35
2002 | | | 10.53 | 99.85 | 98.50 | 99.81 | 15.87 | 56.97 | 31.68 | 19.57
2003 | | | 10.21 | 73.09 | 91.09 | 210.00 | 30.00 | 10.00 | 20.97 | 13.09

In terms of sources of import, China’s imports of crude butyl rubber mainly came from Russia, Canada, and Japan. In 2003, China’s total imports of crude butyl rubber from these three countries amounted to 26.876 kt, accounting for approximately 76.4% of the total imports of crude butyl rubber. Brominated butyl rubber mainly comes from Western Europe and North America**, accounting for about 84% of total imports, while products from Japan account for approximately 3.9% of total imports. The sources of import for primary-form ordinary butyl rubber in China in recent years are shown in Table 6. Table 6: Sources of imports of raw ordinary butyl rubber in China in recent years. Import volume/kt and percentage share, %; Import volume/t and percentage share, %. Russia, Japan, Canada, Others: 3.9, 10.68, 17.65, 23.03, 26.19, 33.63, 22.21, 4.99, 9.67, 55.90, 42.74, 73.32, 74.47, 27.31, 12.71, 5.31, 1.59, 65.04, 33.97, 73.76, 74.94, 2.15, 13.11, 6.02, 2.34, 0.31, 12.14, 24.82, 76.35, 0.94, 4.02, 3.6. Total: 20.276, 100.02, 1.643, 100.02, 3.483, 100.03, 5.168, 100.0. In recent years, the proportion of imports under processing trade and regular trade in China’s raw ordinary butyl rubber imports has been decreasing, while the proportion of imports through border trade has been increasing year by year. The import of ordinary butyl rubber is mainly concentrated at customs ports such as Manzhouli, Xiamen, and Qingdao; butyl rubber imported through these three ports accounts for approximately 79.2% of the total imports. Brominated butyl rubber is mainly imported through customs in Shanghai, Qingdao, Wuhu, etc., with the import volume accounting for about 63% of the total imports. The trade patterns of primary-form ordinary butyl rubber in our country in recent years are shown in Table 7. Table 7: Trade methods for primary-form ordinary butyl rubber in China in recent years – Import methods: 2000, 2001, 2002, 2003. Proportion of import volume in %; Proportion of import volume in %; Proportion of import volume in %; Proportion of import volume in %. Processing trade, general trade, border trade, bonded warehouses, processing with supplied materials, assembly, others: 6.6, 22.8, 33.27, 30.13, 10.03, 21.51, 43, 2.9, 16.1, 0.6, 0.2, 7.5, 6.59, 0, 5.97, 18.25, 10.75, 80.07, 2; 30.4, 27.63, 8.13, 3.5, 0.3, 0.06, 6.27, 0, 6.26, 81, 10.10, 90.78, 70.04, 90, 26.72, 6.74, 3.03, 3.3, 0.2, 0.06, 6.47, 97.26, 32, 10.82, 20.21, 20.06, 0, 0.07, 21, 8.42, 0.75, 9.9, 0.6, 0.2, 0.2. Total: 20.27, 61, 100.02, 1.64, 31, 100.02, 3.48, 31, 100.03, 5, 168, 100.0, 2.3. Current consumption situation and market prospects: With the continuous development of China’s automobile tire industry and other related sectors, the consumption of butyl rubber in China has been increasing in recent years. The supply and demand balance of butyl rubber in China in recent years is shown in Table 8. Table 8: Supply and demand balance of butyl rubber in China in recent years (in kt)
Year: Production, Imports, Exports, Apparent Consumption, Annual Growth Rate (%), Self-sufficiency Rate (%)
1998, 1999, 2000, 2001, 2002, 2003, 2004: 4.05, 55.44, 4.19, 0, 21.54, 52.70, 26.86; 93.00, 83.92, 64.51, 155.44, 98.34, 75.29, 70.21; 20.97, 13.09, 91.09, 210.00, 324.57, 229.88, 642.37; 0, 46.20, 266.90, 210, 0.47, 2, 21.64; 1.89, 9.04, 44.85, 0.20, 0, 9.69, 9.13; 22.22, 6.92
In 2003, China’s total consumption of butyl rubber was 100 kt/year (of which the consumption of halogenated butyl rubber was approximately 40 kt/year). Approximately 84% of this consumption was used in tires, 11% in medical stoppers, and 5% in other applications. (1) Tires. Butyl rubber is widely used in the production of automobile tires, as well as inner liners for pneumatic tires (for bicycles, motorcycles, etc.), vulcanized capsules, and water tires. In particular, the rapid development of radial tires and the continuous improvement in the quality standards for automobile tires have led to an increasing consumption of butyl rubber in China. However, the application of butyl rubber in the tire industry in China still lags far behind that in foreign countries. For example, in developed countries, all tire inner tubes have been made of butyl material. In neighboring countries such as India, as well as Southeast Asian nations like Malaysia and Thailand, the proportion of butyl-based tires has reached 70% to 90%. In China, however, this proportion is still less than 30%; therefore, there is great potential for the use of butyl rubber in China. Domestic regular butyl rubber is mainly used in the production of butyl rubber inner tubes (for bicycles and motorcycles) and curing bladders. The main grades include Exxon’s 268, Bayer’s 301, and Russia’s 1675N. The main companies that use them include Hualin Tire Co., Ltd., Shandong Sanjiao Group Co., Ltd., Qingdao Rubber Group Co., Ltd., Xiamen Cheng Shin Rubber Industry Co., Ltd., Shanghai Tire and Rubber Group Co., Ltd., Hangzhou Zhongce Rubber Co., Ltd., and Zhangjiagang Angu Rubber Industry Co., Ltd., among others. As a pillar industry of the national economy, China’s automobile industry is developing rapidly, moving toward larger scale, higher speeds, and greater specialization. In line with international trends, tires are also evolving toward a radial design, reduced thickness, and tubeless construction. At the same time, the accelerated development of highways has also sped up the butylation of tires. The proportion of butylized inner tubes in China (including those used in agricultural applications) as well as the use of radial tire technology in automobile tires remains low. According to the industrial development plan for the 10th Five-Year Plan issued by relevant authorities, China’s tire industry should focus on the development of radial tires; in terms of tire design, sedan radial tires should evolve into wider-profile versions with higher speed ratings ； For heavy-duty vehicle radial tires, tubeless all-steel radial tires are being developed as a priority to meet the needs of future advancements in automobiles and road infrastructure. The tire industry will promote the production technologies for high-grade passenger car radial tires, light truck radial tires, low-profile and tubeless all-steel heavy-duty radial tires ； Moreover, the development of radial tires has received **policy incentives. With the approval of the State Council, the Ministry of Finance and the **State Taxation Administration issued Document No. 145, stipulating that as of January 1, 2001, radial tires under the category of \"automobile tires\" would be exempt from consumption tax, while other types of radial tires would continue to be subject to a consumption tax rate of 10%. **Policies that encourage the development of radial tires will **drive up demand for halogenated butyl rubber in the domestic market**. In 2003, China’s tire industry (including automotive tires and truck tires) consumed approximately 84 kt/a of butyl rubber; it is estimated that this consumption will reach around 115 kt/a by 2005, of which 56 kt/a was spent on halogenated butyl rubber ； Consumption in 2010 is expected to reach around 170 kt/a, of which the consumption of brominated butyl rubber will be about 100 kt/a. (2) Medical bottle stoppers. Medical bottle stoppers made of brominated butyl rubber represent the second-largest market for such rubber in China. To ensure the safety of medications, **the pharmaceutical regulatory authorities issued Document No. Guoyao Guanzhu 462, stipulating that after the end of 2004, ordinary natural rubber stoppers must no longer be used for all medicinal stoppers in China, including those used in powder injections, infusions, oral liquids, and other dosage forms. Medical stopper manufacturers are expanding their production capacity for butyl rubber stoppers, using halogenated butyl rubber primarily to meet domestic demand. China’s first butyl rubber stopper production line was established and put into operation in 1992 at Hubei Huaqiang Pharmaceutical Packaging Products Factory. At present, there are over 10 large-scale production lines in our country. The companies with high production volumes include Hubei Huaqiang, Shijiazhuang Yixiao, Shanghai Xinya, Jinhu Glass Instruments Factory, Jiangyin Lanling, Jiangyin Zhongma, Jiangyin Non-ferrous Metals, Hubei Bailian, and Zhuzhou Huayi. The main grades of butyl rubber used are Exxon 1066, 2211, 2244, as well as Bayer’s 1045 and 1240. In 2003, China’s consumption of butyl rubber for pharmaceutical bottle stoppers was approximately 11 kt/year; it is estimated that this consumption will reach around 14 kt/year by 2005, and around 20 kt/year by 2010. (3) Other aspects. In other applications, butyl rubber is primarily used in the production of rubber products such as tapes, hoses, adhesives, and waterproofing membranes. The consumption volume in 2003 was approximately 5 kt/year, with demand expected to reach 11 kt/year by 2005 and 20 kt/year by 2010. It can be seen that by 2005, China’s demand for butyl rubber is expected to reach around 140 kt/a, of which the demand for halogenated butyl rubber will be around 70 kt/a. In 2010, the demand for butyl rubber is expected to reach around 210 kt/a, of which the demand for halogenated butyl rubber will be around 120 kt/a. The current consumption and forecast of butyl rubber in China in recent years are shown in Table 9. Table 9: Consumption status and forecasts of butyl rubber in China in recent years. Consumption sectors: 2003, 2005, 2010. Consumption volume in kt, percentage share, %; Consumption volume in kt, percentage share, %; Consumption volume in kt, percentage share, %. Tires, medical stoppers, others: 84, 115, 84.0, 11.0, 5.0; 115, 141, 118, 2.1, 10.0, 7.9; 170, 202, 08, 1.0, 9.5, 9.5. Total: 100, 100.0, 140, 100.0, 210, 100.0, 2.4. Market prices: Before the year 2000, China did not produce butyl rubber; domestic supply relied mainly on imports, so domestic market prices were determined by import prices. The butyl rubber production unit at Beijing Yanshan Petrochemical Company operated abnormally for two consecutive years in 2000 and 2001, resulting in low output; as a result, the domestic market price of butyl rubber remains under the control of imported products. In 2002, the operational rate of this facility reached 70%, and domestically produced butyl rubber accounted for around 31% of the domestic market share, thus having a certain impact on the prices of butyl rubber in that country. However, domestically produced butyl rubber faced strong competition from imported products; the price of this raw form of butyl rubber dropped from $1,980 per ton in 2000 to $1,780 per ton in 2003. Since 1997, the import price of primary butyl rubber in our country has generally remained above $1,500 per ton (with the exception of 1998), while the import price of halogenated butyl rubber has consistently stayed above $2,200 per ton. In 2000, due to the rapid increase in domestic market demand and a decline in exports by Bayer, there was a shortage of butyl rubber in the country, leading to a sharp rise in prices. The average import price of crude butyl rubber reached 1,984 dollars per ton, representing a increase of over 20% compared to 1999. In the past two years, as Russia has increased its exports of butyl rubber to our country, the average import price of butyl rubber in the domestic market has declined. In 2003, the average import price of ordinary primary butyl rubber was $1,789 per ton, a decrease of about 2.6% compared to 2002 ； However, the prices of products **imported from France, Japan, the United States, and Canada remain above $2,000 per ton** ； The average price of products imported from Russia is $1,687 per ton, representing a 5.7% increase compared to 2002. The average import CIF price for primary brominated butyl rubber was $2,568 per ton, representing a 4.1% increase compared to 2002 ； The import price of primary halogenated butyl rubber is about 43% higher than that of regular butyl rubber ； The price of halogenated butyl rubber imported from Europe and the United States is about 21% higher than that of regular butyl rubber, while products imported from Russia are about 1.6% more expensive than regular butyl rubber. The import volume and average price of primary butyl rubber in China in recent years are shown in Table 10. Table 10: Import volume and average price of raw butyl rubber in China in recent years (in USD per ton)
Year: Raw butyl rubber; Halogenated raw butyl rubber
Import volume/kt: Average CIF price; Import volume/kt: Average CIF price
1997 12.74 91.88 77.21 82.08 20.27 62.16 32.38 33.52
1998 155.21 401.16 603.19 841.18 500.18 183.71 789.25
1999 253.22 217.22 297.22 408.22 564.22 466.22 568.30

3. Existing problems and development suggestions
By introducing foreign technology, China has established a butyl rubber production facility with an annual capacity of 30 kt. Through continuous efforts in recent years, safe and stable production has been achieved, with output increasing steadily. The share of this product in the domestic market has gradually expanded, meeting to a certain extent the actual needs of domestic production. However, compared with developed countries abroad, there is still a certain gap, which is mainly reflected in the following aspects: (1) Low production capacity, low output, and a low self-sufficiency rate for products. At present, China’s production capacity for butyl rubber is only 30 kt/a, which is far below the economic threshold of 50 kt/a; it is even lower than the production levels of companies such as Exxon and Bayer, which operate at over 70 kt/a. As a result, the production costs are relatively high, and the self-sufficiency rate for this product is only around 30%, leaving it lacking competitiveness in the international market ； (2) Insufficient investment in technological development, resulting in a still limited variety of grades. At present, the three common butyl rubber product grades introduced into our country cannot be fully produced, nor can other modified butyl rubber products such as halogenated butyl rubber be manufactured. As a result, a large amount of high-grade products must be imported, while the sales of general-purpose products suffer, which to some extent affects the healthy development of butyl rubber industry in our country ； (3) The product quality is not stable enough. At present, the butyl rubber products manufactured in our country still have certain issues regarding adhesion, yellowing, variation across different product batches, volatile components, and fluctuations in the Mooney value, and further improvements are needed ； (4) The product has a limited range of applications. At present, about 84% of butyl rubber products in our country are used in the tire industry, with relatively few applications in other areas ； (5) The level of technical services is not yet able to fully meet the needs of users. To promote the rapid and healthy development of China’s butyl rubber industry, it is recommended to: (1) improve product quality and reduce energy and material consumption in order to enhance the competitiveness of these products in the market. Product quality is a key factor in product competition. In light of the current issues existing in China’s butyl rubber products, it is necessary to increase efforts in technological upgrades in order to continuously improve product quality, taking customer requirements as the standard for product production ； Increase efforts to save energy and reduce consumption, thereby lowering production costs and making the products more competitive in the domestic market. (2) While ensuring the normal and stable operation of existing butyl rubber production facilities, accelerate the research, development, and production of new varieties and grades, increase the range of domestic butyl rubber grades, and continuously improve the product portfolio to better meet market demands. In addition to increasing the demand for butyl rubber in tire inner tube compounds, efforts should also be made to develop markets for butyl rubber in applications other than inner tubes. (3) Expand production scale to meet the urgent demands of the domestic market and increase its share in that market. At present, the production volume of butyl rubber in our country can only meet about one-third of the domestic demand. As demand increases in the future, this coverage rate may become even lower. Therefore, it is recommended that companies with the necessary resources consider building 1–2 production facilities with a capacity of over 50 kt/a in order to meet the actual needs of domestic production. (4) Establish the butyl rubber halide production facility as soon as possible. Halogenated butyl rubber holds an important position among butyl rubbers. With the advancement of application technologies in areas such as radial tires, tubeless tires, and pharmaceutical stoppers in China, the demand for halogenated butyl rubber in the country is set to increase further. Therefore, the country should promptly begin preparations or the introduction of production technologies for brominated butyl rubber, and start production as soon as possible, in order to meet the needs of the domestic rubber industry for materials used in the development of products such as tubeless tires. (5) Strengthen research on applied technologies and improve service awareness and quality. Strengthen ties and cooperation with relevant domestic research institutions in applied fields as well as tire manufacturers, in order to develop specialized formulas and processing techniques for inner tubes, water tires, and bladders suitable for domestically produced butyl rubber. At the same time, a team of expert marketers should be established to lay the foundation for a sustainable cycle of \"market-development-production-market\" for butyl rubber. (6) Actively expand exports and participate in competition in international markets. While meeting domestic demand, efforts should be made to expand exports to international markets, particularly increasing exports to Southeast Asian regions such as South Korea, in order to lay the foundation for butyl rubber to compete on the international stage in the future. References: 1 Dai Changhua. Production and Market Demand of Butyl Rubber in China. Chemical Technology Market, 2000, 2(7): 9–11. 2 Wu Guisong. Market Analysis of Butyl Rubber. Synthetic Rubber Industry, 2004, 27(5): 268–271. 3 Yang Xiuxia. Analysis of Imports and Exports of Synthetic Rubber in China in 2003. Petrochemical Market Forum, 2004, (2): 26–32. 4 Zhou Wenrong. Halogenated Butyl Rubber: The Future Direction — Analysis of the Supply and Demand Situation of Butyl Rubber. China Chemical Information, 2003, (3): 11. Production Situation and Market Prospects of Butyl Rubber at Home and Abroad Li Ming, Wu Xiaoming (Beijing Jiangning Chemical Technology Research Institute, 100076) ABSTRACT: Currently, the world’s total production capacity for butyl rubber is around 892 kt/year, with total consumption reaching approximately 747 kt/year in 2003. It is predicted that global consumption of butyl rubber will exceed 800 kt/year by 2006. In China, the production capacity for butyl rubber is 30 kt/year; in 2003, the total output was around 27 kt/year while consumption was about 100 kt/year. Since output could not meet demand, a large amount of butyl rubber had to be imported each year. It is estimated that China’s consumption of butyl rubber will reach around 140 kt/year by 2005 and 210 kt/year by 2010. Based on the current situation and existing problems in butyl rubber production in China, some suggestions for development are put forward. Keywords: butyl rubber, production, consumption, market forecast. Author’s profile: Li Ming, male, born in 1974, engineer, currently engaged in technical development and management work.