Industry Topic! Analysis of the Production and Sales Status and Development Prospects of the Synthetic Rubber Industry in 2023

1、 Production and sales status of synthetic rubber industry
According to a survey conducted by Shang Pu Consulting, in 2022, the global synthetic rubber production capacity exceeded 20 million tons, with over 50% coming from Asia, followed by EMEA (collectively known as Europe, the Middle East, and Africa) region, accounting for over 15% of global production capacity; North America accounts for about 15%; Russia and Latin America both account for less than 10%. In the Asian region, in 2022, China's production capacity accounted for over 50% of the region's total production capacity, accounting for over a quarter of global production capacity. China is the world's largest producer of synthetic rubber.
According to the statistics of the Rubber Machinery Professional Committee of the China Chemical Equipment Association on the main economic indicators of 21 major rubber machinery manufacturers in 2022, the total sales revenue of rubber machinery in 2022 was 10.41 billion yuan, an increase of 1.1%. Based on this calculation, the total sales revenue of China's rubber machinery industry in 2022 reached 13.75 billion yuan, an increase of 1.1%. Enterprises with high sales revenue mainly include Softcontrol Group, Sachi Group, Dalian Rubber and Plastic Machinery, Sinopec Guilin Engineering, Tianjin Saixiang Technology, Yiyang Rubber Machinery, Guilin Rubber Machinery, Dalian Second Rubber and Plastic Machinery, Fujian Tianhua Intelligent Equipment, and Qingdao Hailang Special Equipment.
According to the latest data released by the National Bureau of Statistics, China's synthetic rubber production in December 2022 was 809000 tons, a year-on-year decrease of 8.1%. The cumulative production of synthetic rubber from January to December was 8.233 million tons. From monthly data, China's synthetic rubber production showed a steady growth trend in the first half of 2022, but in the second half of the year, there was a significant downward trend due to factors such as tight raw material supply and environmental protection restrictions.
In 2023, China's synthetic rubber industry still faces multiple challenges such as supply-demand imbalance, fluctuations in raw material prices, increased environmental pressure, and international trade frictions. However, there are also opportunities for optimizing product structure, improving technological innovation, recovering market demand, and increasing export earnings. It is expected that China's synthetic rubber production will maintain stable growth in 2023, reaching around 8.5 million tons, a year-on-year increase of 3.2%.
2、 Competitive landscape and market share in the synthetic rubber industry
The production capacity of the synthetic rubber market is highly concentrated, and the production capacity scale of Alang Xinke is in a leading position. In 2022, Arlanxeo's annual production capacity of synthetic rubber exceeded 2 million tons, with four companies including Sinopec, PetroChina, SIBUR/NKNH, and Jinhu Petrochemical (KKPC) having an annual production capacity of over 1 million tons, and five companies including ExxonMobil, Synthos, Goodyear, Versalis, and ENEOS having an annual production capacity of between 600000 and 1 million tons. These enterprises collectively account for nearly 60% of global synthetic rubber production capacity.
According to a survey by Shangpu Consulting, the top ten companies in China's synthetic rubber market share in 2022 are Sinopec, PetroChina, Arlanxeo, Jinhu Petrochemical, ExxonMobil, SIBUR/NKNH, Goodyear, Versalis, ENEOS, and Synthos. These enterprises collectively account for nearly 80% of China's synthetic rubber market share.
In 2023, the competitive landscape of China's synthetic rubber industry will continue to remain stable. Leading enterprises will rely on their scale and technological advantages to maintain their market position, and small and medium-sized enterprises will face greater survival pressure. Meanwhile, with the continuous production of new and expanded projects, the overcapacity problem in China's synthetic rubber industry will further intensify, leading to a decrease in product prices and a reduction in profit margins.
3、 Export situation of synthetic rubber industry
Export earnings have increased significantly for three consecutive years, making it the biggest highlight of China's rubber machinery industry. In 2021, the export delivery value reached 3.16 billion RMB, an increase of 41.1%; In 2022, the total export earnings of China's rubber machinery industry were 650 million US dollars, an increase of 16%. Enterprises with higher export delivery value include Softcontrol Group, Dalian Rubber and Plastic Machinery, Tianjin Saixiang Technology, Sachi Group, Huaao Equipment, Yiyang Rubber Machinery, China Chemical Guilin Engineering Company, Guilin Rubber Machinery, and Qingdao Hailang Special Equipment, with a delivery value of over 100 million yuan.
The main reason for the export growth is that in recent years, China's tire industry has launched more new/expanded tire projects abroad, especially in Southeast Asia, and there is a high demand for rubber machinery. Chinese rubber machinery enterprises have undertaken a large number of orders for overseas tire investment projects. The foreign epidemic has been completely lifted in 2022, and investment in tires by world tire giants such as Michelin has returned to pre epidemic levels, leading to an increase in international demand for rubber machinery. In addition, the continuous depreciation of the RMB against the US dollar is also beneficial for China's rubber machinery exports.
In 2023, most of China's overseas investment projects in tires continued, with an increase in investment projects by world tire giants. The exchange rate of the RMB against the US dollar depreciated to around 7 yuan, which is beneficial for rubber machinery exports. It is expected that the growth of export earnings will remain a high probability event, but the growth rate will not be too large.
4、 Profit level of synthetic rubber industry
The profit level of the synthetic rubber industry is still not ideal. In 2022, the overall gross profit level of industry products is still low, and the profitability is not strong. The main reasons include low market demand, fierce competition, low order prices, and high operating prices of raw materials such as steel, leading to a significant increase in costs. Another reason is that some enterprises have insufficient orders, production is not saturated, and some products are delayed in delivery.
In 2023, the synthetic rubber industry will still face multiple factors such as weak market demand, overcapacity, fluctuations in raw material prices, and increased environmental pressure, leading to a decrease in product prices and a reduction in profit margins. It is expected that the profit level of the synthetic rubber industry will continue to be sluggish in 2023.
Conclusion and recommendations
In summary, in 2022, the synthetic rubber industry in China showed an overall trend of steady decline, with stable growth in production and sales, but there was no significant improvement in the competitive landscape and profit level. Export earnings are the biggest highlight of the industry, but they also face risks such as international trade frictions. In 2023, China's synthetic rubber industry will still face multiple challenges such as supply-demand imbalance, fluctuations in raw material prices, increased environmental pressure, and international trade frictions. However, there are also opportunities for optimizing product structure, improving technological innovation, recovering market demand, and increasing export earnings.
In response to the current situation and trends, Shangpu Consulting provides the following suggestions:
Synthetic rubber enterprises should strengthen technological innovation and product research and development, improve product quality and performance, develop high value-added, high-performance, low energy consumption, and environmentally friendly synthetic rubber products, meet the diversified and personalized needs of the market, and enhance market competitiveness and profitability.
Synthetic rubber enterprises should strengthen industrial chain collaboration and resource integration, optimize production capacity layout and product structure, reduce production costs and operational risks, improve resource utilization efficiency and market response speed, and enhance industry risk resistance.
Synthetic rubber enterprises should actively expand their domestic and foreign markets, increase brand building and promotion, enhance product awareness and reputation, consolidate and expand their domestic market share, actively participate in international market competition, seize the opportunity of export earnings, and enhance their international market influence.
Synthetic rubber enterprises should strengthen their environmental awareness and social responsibility, strictly comply with national and local environmental regulations and standards, increase environmental investment and technological transformation, reduce pollutant emissions and energy consumption, and achieve green production and sustainable development.