Overcapacity Biggest challenge for Synthetic Rubber

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Overcapacity is one of the biggest challenges facing the global synthetic rubber (SR) industry. This has been driven mainly by over-investment in China during the past years. This situation of overcapacity has forced many facilities to work with reduced operating rates and delay or cancel several expansion projects. Some facilities have been deactivated or dismantled and others are in the process of switching over to produce other elastomer types such as SBS. This is most noticeable in China and the Asia Pacific region.
Even so, the SR industry is expected to continue to grow moderately compared to the previous years. By 2016, the installed capacity is expected to grow by 2 per cent, according to our information. To this situation of overcapacity, if we add dull world economic growth, the situation becomes more complicated.

Uses in key industries

Synthetic rubbers have been leading the global rubber market since the 1940’s and are used in the manufacture of many types of products that we use every day which make our lives more comfortable. The automotive and tyre sectors will keep driving the SR demand. The construction sector generates significant demand of synthetic rubber in many end-uses such as paving/roads, waterproofing membranes, and adhesives and sealants. It is also very useful to the food industry with several end uses such as labelling, packaging, and more. Synthetic rubbers are also the material of choice for appliances, footwear, personal care, medical applications and others.
The SR industry has an important and extensive business relationship with all these key industries, and therefore, has been influenced by the performance and situation of its trading partners. The global SR market experienced a sharp downfall in demand during the global economic crisis. However, coming out of the deep recession impact, it expects a moderate growth rate close to 2 per cent CAGR in the upcoming years.

Read the source article at Rubber Asia