Industry chain analysis of China's reclaimed rubber industry in 2021: booming automotive industry is the main driver of the reclaimed rubber market

  First. Industry chain structure

    Reclaimed rubber is a rubber raw material that is used in the production of rubber products and scrap rubber products after crushing, through chemical and physical processing, to remove the elasticity of vulcanized rubber and restore its elasticity and viscosity, so as to regain the ability to mix and vulcanize with raw rubber, so as to be reapplied to the rubber industry. Recycled rubber is mainly divided into three categories: tire recycled rubber (made of waste tires as the main material), butyl recycled rubber (made of waste butyl rubber as the main raw material) and EPDM recycled rubber (made of waste ethylene-propylene rubber as the main raw material).

 Second, upstream industry analysis

    Rubber as an important raw material in China is still highly dependent on imports. According to statistics, the import dependence on natural rubber (NR) in China has exceeded 70%, and the import dependence on synthetic rubber (SR) has exceeded 40%. On the one hand, the shortage of rubber resources seriously restricts the rapid development of China's rubber industry; on the other hand, when rubber products reach their service life or are abandoned, they become solid waste, especially waste tires that have gradually evolved into "black pollution". Waste rubber is effectively recycled, which can not only alleviate the problem of insufficient rubber resources in China but also reduce environmental pollution, so the comprehensive utilization of the waste rubber industry was born. In the form of comprehensive utilization of waste rubber in China, the proportion of recycled rubber is over 70%, and rubber powder accounts for about 7%. The production and application of recycled rubber have become the main way of comprehensive utilization of scrap rubber.

    70% of China's total scrap rubber comes from scrapped automobile tires. 2020 China's scrap tire generation will be 13.9 million tons, down 4.1% year-on-year from 14.5 million tons in 2019. According to the statistics of 50 enterprises by the China Tire Recycling Association: the total designed capacity of tire recycled rubber in 2019 is 36.9 tons, the actual output is 193,000 tons, and the capacity utilization rate is 52%.

    Rubber powder is one of the main materials for the production of recycled rubber, 4.6 million tons of recycled rubber requires 4.2 million tons of rubber powder, and together with the direct application of rubber powder of 850,000 tons, the production of rubber powder reaches 5.05 million tons in 2020. China is not only the world's largest producer of recycled rubber but also the world's largest producer of rubber powder.

Third, the midstream industry analysis

    1. Supply and demand situation

    As the processing technology of recycled rubber continues to mature and the production cost is low, the scope of the application continues to expand, in the domestic, with recycled rubber instead of part of the raw rubber production of various rubber products has been decades of history, recycled rubber has become the third-largest source of rubber after natural rubber, synthetic rubber. 2020, China's recycled rubber production reached 4.6 million tons, flat year-on-year; demand is 4.597 million tons, slightly lower than 2019 with a slight decrease.

The booming automotive and aerospace industries are the major drivers of the recycled rubber market. Rising natural rubber prices are forcing automotive manufacturers to shift to products with lower processing costs, recyclable products or rubber blends. The demand for reclaimed rubber from the tire industry is largely driving the industry. 2020 China reclaimed rubber market size is about 3.98 billion yuan, down 3.8% YoY.

 According to China Rubber Industry Association data: for 2019 China reclaimed rubber, and rubber powder production as TOP3 enterprise in order for Nantong HuiLi Rubber Co.

    2. Import and export situation

    China's recycled rubber products not only meet the domestic market demand but also occupy a certain market share in the international market. In terms of amount, China's recycled rubber has been in trade surplus, and the export quantity of China's recycled rubber in the first three quarters of 2021 was 94,000 tons, with the export amount of 88,875,000 USD; the import quantity was 88,000 tons, with the import amount of 59,687,000 USD.

In terms of import amount, China's recycled rubber is mainly imported from Thailand, India, Malaysia and other major rubber production sites, with $32.596 million of recycled rubber imported from Thailand in 2020; $14.390 million of recycled rubber imported from India; China's recycled rubber exports are more scattered, with $8.303 million exported to the United States in 2020.

Fourth, industry downstream analysis

    In the application ratio of recycled rubber in China, the combined proportion of force car tires and auto tires is over 70%, which has become the main application area of Chinese recycled rubber products. The production and application of recycled rubber have to a certain extent alleviated the situation of rubber resources shortage in China, and in the future, driven by the development of the rubber industry and progress of the production process, recycled rubber products are expected to penetrate into the fields of construction materials and automobile interiors, etc., and continuously expand the application scope. the output of rubber tire outer tires in China in the first three quarters of 2021 is 665 million; the output of automobile tires in China in 2020 is 634 million pieces.