Yo Hibiya Managing Director ETIC Inc. OUTLOOK FOR CR & HNBR Polychloroprene, Chloroprene rubber 1
CR Outlook Polychloroprene (CR), chloroprene rubber is one of the traditional synthetic rubber which has long history, 84 years. It is said that CR is Well balanced elastomer in its property However, not typical specialty type elastomer, since CR is not used in very severe conditions of use. CR Outlook 2
Carbone Such as Coal Production Processes Acetylene Method Limestone CARBIDE SYNTHESIZING Butadiene Method Butadiene Water Calcium Carbide ACETYLENE GENERATING Acetylene CHLORINATION AND ISOMERIZATION HCl CHLOROPRENE O SYNTHESIZING S Chloroprene Chloroprene POLYMERIZATION POLYMERIZATION Data source: 1. DENKA CR 2. IISRP document CR CR CR Producers Producer Capacity (MTPA) Percentage Comments ASIA Japan DENKA 100,000 27% Expanded to 100kt in 2009 Showa Denko 20,000 5% TOSOH 34,000 9% Subtotal 154,000 41% CHINA Changshou Cehmical 28,000 7% Plant expansion was announced but not confirmed. Shanan Synthetic Rubber 30,000 8% On stream in 2011 Subtotal 58,000 15% TOTAL (ASIA) 212,000 56% EUROPE EU - including Former CIS, Middle East, Africa Lanxess 57,000 15% The capacity was expanded by 6kt in 2012. Nairit Planat 8,000 2% TOTAL (EUROPE) 65,000 17% NORTH AMERICA DENKA/Mitsui & Co J/V and DuPont agreed to acquisition of DuPont Performance Elastomer 100,000 27% DuPont's CR business by the J/V subject to the competent approval. TOTAL (NORTH AMERICA) 100,000 27% TOTAL (WORLDWIDE) 377,000 100% 3
CR Producers DENKA 54% DENKA/Mitsui & Co. aim to acquire Dupont s CRbusiness during the 1st half of 2015, subject to official approvals of competent authorities. CR Demand Dramatic growth is not expected since some part of CR application has been replaced by EPDM. Total demand in the world currently unavailable but we can get the rough idea for market structure through CR demand in Japan. 4
CR Demand Structure Automotive 70% Belt, Boots, Engine Mount, Brake, Power Steering Hoses Others 30% Seismic Isolation Surgery Gloves (CR Latex) CR latex has strong cohesive force and is suitable for environment friendly adhesive which is replacing solvent type adhesive. Export of CR & CR Latex China has been major export destination from Japan. But the export for China has been replaced by their domestic product and export decreased. 5
Hydrogenated NBR (HNBR) HNBR Outlook Consumption of Hydrogenated NBR (HNBR) is also growing. Its market size is not big as CR. The elastomer is characterized by good resistance to high temperatures and in contact with fuels, oil and ozone. 6
HNBR Producers Producer Capacity (MTPA) Percentage Comments ASIA Zeon Corporation 4,000 29% Takaoka Zeon Corporation 500 4% Kawasaki, Started the operation in 2013 EUROPE EU - including Former CIS, Middle East, Africa Lanxess 4,200 31%Leverkusen, Including 40% expansion announced in 2012 NORTH AMERICA Zeon Chemical l.p 5,000 36% Houston, Including 1000tons expansion in 2013 TOTAL (WORLDWIDE) 13,700 100% HNBR Demand HNBR demand is very strong and its market is growing more than 10% annually. 60%-70% of its demand is in V-belt including timing belt. 7
HNBR Demand In the past metal made timing belt replaced most of HNBR made timing belt because of life of the belt. New product for the timing belt, Belt in Oil, has been developed recently. HNBR Demand More consumption in this application is expected in the near future. Timing belt for Turbo Diesel is mostly made of HNBR. More diesel car is getting more popular because of environment friendly engine. 8
Thank you for your attention. Yo Hibiya Managing Director ETIC Inc. OUTLOOK FOR CR & HNBR 9