After the successful implementation of anti-dumping measures on styrene-butadiene rubber (SBR) in 2003, the domestic market was effectively shielded from low-cost imports coming from Russia, Japan, and South Korea. At the same time, strong domestic demand and fully utilized production capacity led to a record output of over 400,000 tons for the first time. This positive momentum encouraged industry confidence, prompting Kyrgyzstan to launch a 50,000-ton-per-year SBR project in April 2004, which began operations successfully. Later that year, Shenhua also expanded its capacity by an additional 50,000 tons in March 2005. With a balanced supply and demand situation, the SBR industry experienced rapid growth.
Although the number of imports from neighboring countries dropped significantly after the anti-dumping measures were introduced, and the self-sufficiency rate improved, the country still relied heavily on imports. In 2003, imports reached 152,000 tons, making up 27% of total domestic supply. By 2004, this had declined to 115,000 tons, or about 18% of total supply. However, with several large-scale projects currently under construction in China, there are growing concerns about potential overinvestment in the SBR sector.
Looking ahead, several manufacturers have announced plans to either build new SBR facilities or expand existing ones. For example, Yangzi Jinpu is set to add a new 100,000-ton-per-year milk polybutadiene rubber project, with the first phase expected to be completed and operational by mid-2006, producing around 30,000 tons annually. Bridgestone is investing approximately 50 million yuan in a 60,000-ton-per-year SBR plant in Nanhai. Lanhua plans to construct a facility capable of producing between 100,000 and 150,000 tons per year by the end of 2007. Qilu Petrochemical will also expand its SBR capacity by 100,000 tons per year, bringing total capacity to 230,000 tons once approved. If all these projects proceed as planned, domestic SBR output could reach approximately 770,000 to 780,000 tons.
According to projections from major downstream industries in China, SBR consumption is expected to grow steadily over the next three years, with an average annual increase of 5% to 6%. This would bring total demand to around 700,000 to 720,000 tons by 2008. At that point, supply is likely to exceed demand by 60,000 to 70,000 tons. Moreover, the anti-dumping duties are scheduled to expire on September 9, 2008, which may further intensify the oversupply issue. Given these developments, it is crucial to manage current investment trends carefully to avoid market imbalances.
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