Top 10 news of China's rubber industry in 2022

1. The rubber industry encounters unprecedented difficulties

Affected by unexpected factors such as the domestic epidemic in the first half of the year and the end of the year and the conflict between Russia and Ukraine, the downward pressure on the economic operation of the rubber industry continued to increase, which was reflected in the serious contraction of the domestic market, the sharp decline in industry efficiency, the continuous rise in factory inventory, and the continued decline in operating rate. To this end, the China Rubber Industry Association organized key enterprises in the tire, tire marketing, rubber materials, hose tapes, tire tires, rubber machinery molds, skeleton materials, rubber products and other industries in the first half of the year to hold online symposiums to understand the problems existing in the industry, and timely report the difficulties faced by the industry to the relevant national departments.

In 2022, the price of raw materials such as rubber, carbon black, additives, cord fabric, steel cord and other raw materials and energy prices rose sharply, driving the cost of rubber products enterprises to rise sharply and seriously eroding corporate profits. According to the statistics of the China Rubber Association, in January ~ October, the profit of key member enterprises in the whole industry decreased by 13.18% year-on-year (the same below), the number of loss-making enterprises increased by 70.37%, and the inventory of finished products increased by 27.69%, encountering unprecedented difficulties since the outbreak of the epidemic. Although tire companies frequently raise prices during the year, in the case of weak demand and rising costs, product prices cannot be transmitted normally, resulting in high inventory of channels and production enterprises, and the pressure bearing capacity of tire enterprises is getting weaker and weaker, and the profit of the domestic main business of China Rubber Coordinated Research Tire Industry fell by more than 50%. According to the statistics of the profits of key member enterprises of the China Rubber Association, in January ~ October, the profits of various specialties decreased more or less, of which the profit of the tire industry fell by 17.81%, the hose tape industry decreased by 5.42%, the rubber products industry increased slightly by 1.06%, the rubber shoe industry increased by 29.30%, the latex industry decreased by 15.77%, the carbon black industry decreased by 78.55%, the rubber machinery mold industry decreased by 2.28%, the waste rubber comprehensive utilization industry decreased by 31.96%, and the rubber additives industry increased by 16.34% , the skeleton material industry decreased by 47.79%.

According to the coordinated research of China Rubber, due to the serious contraction of the domestic market, the domestic all-steel tire capacity utilization rate will be about 60.8% in 2022, a decrease of 17.7 percentage points; the capacity utilization rate of semi-steel tires will be about 70.2%, a decrease of 6.3 percentage points; the replacement and maintenance consumption of all-steel tires will decrease by about 30%, and the consumption of semi-steel tire replacement and maintenance will decrease by about 20%. According to the statistics of China Rubber Association, in January ~ October, the output of radial tires of key tire enterprises fell by 5.12%, and the output of all-steel tires decreased by 10.45%; The inventory of most professional finished products showed an increasing trend, including tires increased by 13.73%, tire increased by 9.05%, hose tape increased by 10.99%, rubber products increased by 10.59%, rubber shoes increased by 26.29%, latex decreased by 9.65%, carbon black increased by 50.20%, rubber machinery mold decreased by 12.57%, waste rubber comprehensive utilization increased by 1.64%, and skeleton materials increased by 17.12%.

2. Tire enterprises have made new breakthroughs in trade frictions through judicial procedures

With the intensification of foreign trade frictions with China, domestic tire companies have protected their rights and interests through judicial procedures and made positive progress. On May 4, the General Court of Justice of the European Union rendered a first-instance ruling on the case brought by the China Rubber Industry Association and the China Chamber of Commerce for Import and Export of Minmetals and Chemicals on behalf of 27 Chinese exporter enterprises against the European Commission against the "double-reverse" tax order for Huaka bus tires, ruling that all the "double-reverse" tax orders against Chinese companies sued should be revoked. Winning the first instance of this case is of great significance: on the one hand, the Chinese enterprises involved in the litigation are expected to return to the European market; On the other hand, it provides new ideas for opposing unfair trade remedy measures through judicial remedies. On July 8, the European Commission issued the "Reinvestigation Announcement" and "Announcement on the Opening of the Registration Procedure for Imported Products", announcing that the European Commission had abandoned the appeal, and China locked in the outcome of the first instance. At the same time, the European Commission decided to re-investigate the winning Chinese enterprises. During the resumption of investigations, EU Customs will not levy a "double-reverse" tax on litigation enterprises, and after the results of the investigation are announced, it may only be paid back at the level of the new measures; After the resumption of the investigation, the litigant may not be implemented or implement a lower level of "double-reverse" measures.

In addition, during the first final review of the anti-dumping of passenger car and light truck tires in China, the US Department of Commerce ruled that the dumping margin of Sen Kirin Tire was 4.41%, and Sen Kirin Tire believed that the judgment was suspected of violating US law and decided to appoint a team of lawyers to sue the US Department of Commerce for the final judgment to the US Court of International Trade. After four years of argumentation, the US court finally rendered a judgment upholding our claim and requesting the US Department of Commerce to recalculate the dumping duty rate of Sen Qilin. In June 2022, the U.S. Department of Commerce announced that it would reduce the dumping tax rate of Sen Kirin tires to 1.27%, and from December onwards, Mori Kirin began to receive tax refunds from US customs, with an estimated total tax refund of about US$9 million.

3. The General Administration of Customs carried out the reform of single consumption management of tire processing trade to reduce the burden on enterprises

In order to promote the stability and quality of foreign trade, support the high-quality development of processing trade, and enhance the core competitiveness of processing trade enterprises, the Inspection Department of the General Administration of Customs will promote the reform of the single-consumption management mode of tire processing trade nationwide in 2022 on the basis of joint research with the China Rubber Industry Association, preliminary pilot (2 enterprises) and risk assessment in 2021. To this end, the China Rubber Association has established an industry unit consumption working group and formulated the "Tire Processing Trade Single Consumption Industry Quota Parameter Table" as a supporting material for comprehensively promoting the reform of single consumption management of tire industry processing trade; Cooperate with the relevant work of the General Administration of Customs and provide professional support as needed; At the same time, combined with the development of the industry, summarize the feedback of enterprises and communicate with the General Administration of Customs to explore the dynamic management mode of industry quota parameters. Tire companies generally believe that the use of industry quota parameters to implement management saves a lot of manpower and material resources for enterprises, while avoiding operational risks, and has been unanimously supported by enterprises.

4. Industry associations actively promote the green and low-carbon development of the rubber industryIn order to promote the low-carbon development of the rubber industry, the China Rubber Industry Association actively cooperates with relevant national departments to implement policy implementation and standard revision, and at the same time formulates relevant group standards for green development of the industry, and innovates the social welfare publicity activities of Green Tire Safety Week.

In terms of cooperating with the implementation of national policies, in view of the "Implementation Plan of "Three Products" in the Raw Material Industry jointly issued by the Ministry of Industry and Information Technology and other four departments, the China Rubber Association has made authoritative interpretations from the development status of the tire industry, the guiding role of the "three products" implementation plan to the tire industry, and the main measures of the tire industry to implement the "three products" implementation plan, and put forward policy suggestions. The interpretation of the plan pointed out that the tire industry should focus on the development of green and low-carbon products, enrich new material varieties, optimize product design means, strengthen quality target management, improve the effectiveness of the quality system, establish an innovative evaluation system, build a brand globalization development strategy, strengthen upstream and downstream linkage and other seven aspects, accelerate the implementation and landing of the industry's "increase variety, improve quality, and create brand" strategy, in order to effectively promote the transformation of the industry development model from scale and speed to quality and efficiency.

In terms of cooperating with the revision of national standards, first, in response to the Ministry of Industry and Information Technology's public solicitation of opinions on the revision of mandatory national standards such as "Car Tires" (GB 9743) and "Truck Tires" (GB 9744), the China Rubber Association organized experts from domestic and foreign tire enterprises to conduct in-depth discussions on the content of the two national standard draft for comments, and incorporated the tire rolling resistance and wet road grip limits into the standards in accordance with the China Green Tire Roadmap formulated by the China Rubber Association. Second, the National Standards Committee included the two standards of "Energy Consumption Limit per Tire Unit Product" (GB 29449-2012) and "Energy Consumption Limit of Carbon Black Unit Product (GB 29440-2012) into the integration and revision plan, and the China Rubber Association is responsible for organizing the implementation of the integration and revision of this standard. Through a large number of data research, as well as the analysis and processing of enterprise research data, the boundary of standards has been redefined; It is the first to propose to separate raw oil and fuel oil, and not include raw oil in the calculation of carbon black energy consumption, so that the energy consumption limit per unit product of carbon black is greatly reduced; Integrate the two products of tires and carbon black into one energy consumption standard, and finally complete the draft of the "Energy Consumption Limit per Unit Product in the Rubber Industry (Tire and Carbon Black)". Third, the Ministry of Industry and Information Technology issued two industry standards, "Evaluation Requirements for Green Factories in the Tire Industry" (HG/T 6061-2022) and "Requirements for Green Supply Chain Management of Tire Manufacturing" (HG/T 6062-2022), formulated by the China Rubber Association, which were implemented on April 1, 2023, and the release and implementation of these two industry standards provided a basis for the green transformation and upgrading of the tire industry.

In terms of social welfare publicity, China Rubber Association has organized the "6•15 China Green Tire Safety Week" large-scale public welfare activities for eight consecutive years. In 2022, under the circumstances of the multi-point spread of the epidemic and the large-scale outbreak at the end of the year, the China Rubber Association made a comprehensive innovation in the activities of the Safety Week: it lasted for a long time, from June 15 to December 31; Opened a tire brother classroom to promote tire labels, tire safety maintenance knowledge, etc. to consumers; Opened a micro-vision account, through WeChat video to vividly spread how to choose tires, read the numbers on tires, tire use and maintenance, and also opened two corporate sessions; A total of 30 videos were recorded, which improved the reputation of tire brands, popularized green tire knowledge to the public, and promoted the green upgrading and development of the tire industry from the consumer side.

5. New hot spots appear in the structural adjustment investment of tire enterprises

In 2022, the production and sales of new energy vehicles in the domestic automobile market will be unique, bringing opportunities to China's own brand tires, tire companies seize the opportunity to actively adjust the product structure, from the contour, pattern, formula, structure, materials, process and other dimensions of technological innovation, new energy vehicle tire new products have been launched. Zhongce, Linglong, Senqilin, Pulin Chengshan and other enterprises in the field of new energy tires advanced layout, is the world's earliest batch of R & D and manufacturing of new energy tire enterprises, has achieved mature technology, mature quality, mature production, and is forming a continuous leading R & D and manufacturing capabilities. The production and sales of trucks and buses continued to be sluggish, and some foreign-funded enterprises adjusted their operation strategies and withdrew from China's truck and bus tire market. Off-highway tires have become a hot spot for investment, and a number of projects have started one after another. On April 6, Fengshen Tire started construction with a total investment of 95.01 million yuan and an annual output of 30,930 large-sized wide-body dump trucks for engineering radial tire quality and efficiency improvement; On April 19, Haian Group invested a total of 7 billion yuan, including an annual output of 300,000 all-steel large-scale engineering radial tires, 15,000 all-steel giant engineering radial tires and other projects; On September 13, the first phase of the upgrading and transformation project of Tianjin's high-end green tire manufacturing industry chain - agricultural radial tire and bias engineering tire workshop expansion project started; Guizhou Tire accelerated the implementation of 380,000 all-steel engineering radial tire intelligent manufacturing projects. In addition, Sailun Group, Fengshen Tire, Shuangqian Tire, Linglong Tire and other enterprises have also issued announcements or environmental impact assessment announcements to invest in the construction of off-highway tire projects in phases, covering giant tires, large and small and medium-sized engineering tires, agricultural radial tires, small industrial tires, solid tires and other products.

6. Leading companies in the rubber industry have merged and reorganized one after another

Since 2022, domestic rubber enterprises have frequently merged and reorganized, and many leading enterprises in the industry have been involved. On January 30, Zhongce Rubber and Tianjin Guolian Mixed Reform officially established Zhongce Rubber (Tianjin) Co., Ltd., and officially opened on April 3, Zhongce Tianjin plans to invest 2.8 billion yuan in three years to build the Tianjin plant into the largest off-highway tire production plant in Asia. Daye completed the acquisition of Shengtong Steel Cord and consolidated its financial statements from May. On June 1, Dalian Heavy Industry Equipment Group Co., Ltd., established after the reorganization of Heavy Industry Lifting Group, Dalian Rubber and Plastics and Jinzhou Heavy Machinery, was launched. On June 29, Robust (Guilin) Latex Products Co., Ltd. was inaugurated, and Robust Medical Supplies Co., Ltd. and China Resources Zizhu Pharmaceutical Co., Ltd. acquired 100% of the shares of Guilin Zizhu Latex Products Co., Ltd. for 450 million yuan. On July 18, Wangneng Environment Co., Ltd. announced that its subsidiary Huzhou Wangneng Investment Co., Ltd. intends to acquire 77% of the equity of Nantong Huili, the largest recycled rubber enterprise in China, for 331 million yuan; On August 16, Nantong Huili completed the registration procedures for industrial and commercial changes, and is fully engaged in the construction of a new plant, planning to restore butyl recycled rubber production capacity by the end of the year. On November 16, Hainan Rubber disclosed that it intends to acquire 36% of the equity of Sinochem International's listed company in Singapore (Hesheng Company) through overseas SPV companies, namely Sinochem International's natural rubber business segment. In addition, on September 22, Anhui Zhongding Seal Co., Ltd. announced that it will jointly establish Huzhou Hongtian Equity Investment Partnership (Limited Partnership) with other investors, and will expand its business in the field of new energy vehicles through Huzhou Hongtian; On December 23, the company announced that it intends to acquire 100% of the shares of Schmitter Group GmbH (Schmidt) and Jinmeijia Electronics (Shenzhen) Co., Ltd. respectively to accelerate the development of its three-electric cooling system and fluid pipeline system assembly products in the field of new energy vehicles.

7. The rubber industry has achieved remarkable achievements in scientific and technological innovation

In 2022, the rubber industry adheres to low-carbon emission reduction, innovative development, and outstanding achievements in scientific and technological innovation. 7 projects were included in the public list of the 2022 China Petroleum and Chemical Industry Federation Science and Technology Award, of which 4 projects won the second prize of the Science and Technology Progress Award: four international standards for RFID electronic tags for tires, key technologies and applications of grid-type load-free inflatable hollow tires, development and industrialization of green synthesis process of high-dimer content TMQ rubber antioxidants, and development of key technologies of high-performance insoluble sulfur yellow; Three projects won the third prize of the Science and Technology Progress Award: key technology and industrialization of heat-oxygen and cutting-resistant tires based on low-temperature balanced vulcanization, industrialization technology and application of high-performance terpene resin for green tires, development and industrial application of high-aromatic carbon environmental protection aromatic rubber oil complete set technology. 5 projects were selected as candidate enterprises and projects of the 7th China Industry Award, Commendation Award and Nomination Award, and candidate projects of China Industry Award: "Public Relations and Application Demonstration of Key Technologies of the Whole Rubber Tire Industry Chain" project of the National Rubber and Tire Engineering Technology Research Center; China Industry Award Commendation Award Candidate Projects: Qingdao Sen Kirin Tire Co., Ltd.'s "Intelligent Manufacturing in the Tire Industry" project, Triangle Tire Co., Ltd.'s "Research and Application of Intelligent Green Manufacturing Technology Based on Big Data, AI, Internet of Things and Other Information Technology" project; China Industry Award Nomination Award Candidate: Shandong Weipus Rubber Co., Ltd.; China Industry Award Nomination Award Candidate Project: "Development of Five Composite Rubber Extrusion Unit" project of China Chemical Industry Guilin Engineering Co., Ltd. In addition, Dalian Rubber and Plastic Machinery Co., Ltd. won the "Silver Award of the 9th Liaoning Governor Quality Award". The domestic large aircraft C919 aviation radial tire project developed by Triangle Tire won the gold medal of the 4th "Governor's Cup" Industrial Design Competition of Shandong Province. The key technology development and industrialization application project of continuous liquid phase mixing of synthetic rubber, jointly carried out by Yiwei Rubber Research Institute, Yikai New Materials and Sailun Group, won the first prize of the 2022 Shandong Province Technology Invention Award, which achieved the first subversive innovation of traditional rubber mixing technology in the world. Sailun Group, Zhongce Rubber, Chengshan Group, Yanggu Huatai, Beijing Rubber Industry Research and Design Institute, and China Chemical Industry Guilin Engineering Co., Ltd. entered the list of "China Petroleum and Chemical Industry Technology Innovation Demonstration Enterprises" in 2022.

8. Overseas projects of rubber enterprises to increase capital to accelerate internationalization

With the gradual recovery of foreign markets in 2022, domestic rubber companies have increased their capital in overseas projects to accelerate the process of internationalization. On January 27, GM's Cambodia project, with a total investment of 1.9 billion yuan, held a groundbreaking ceremony, with an estimated annual production capacity of 5 million semi-steel radial tires and 900,000 all-steel radial tires. On March 28, Longma Tire held the inauguration ceremony of the project at Servais Langma Tire (Private) Co., Ltd., a joint venture company in Pakistan. On May 19, Shengao Chemical's first overseas plant was officially put into operation in Thailand, and the first batch of orders was successfully shipped out of the warehouse. On September 27, the China Securities Regulatory Commission passed the review of the fundraising plans of GM and Sailun Group, and the total amount of funds raised by GM shares did not exceed 1.018 billion yuan for Cambodia's high-performance radial tire project and supplementary working capital; Sailun Group planned to raise 2.009 billion yuan to invest in the construction of radial tire projects in Vietnam and Cambodia factories to further expand overseas tire production capacity. On October 3rd, the land signing ceremony of the second phase of Xingda Steel Cord (Thailand) Co., Ltd. was held in Bangkok, Thailand. Sen Kirin Tire Spain project was approved by the Galician Parliament of Spain and recognized as a strategic industrial project, and the plant plans to produce 12 million radial tires for high-performance cars and light trucks per year. The expansion project of Shuangxing Kumho Vietnam plant has entered the final stage, and all administrative procedures related to the trial operation have been completed, and the wholly-owned subsidiary of Qingdao Doublestar directly holds 42.409% of the equity of Kumho Vietnam factory. On December 27th, HOMAG (Thailand) Co., Ltd. held a groundbreaking ceremony for the second plant in Rayong Industrial Park, Thailand.

9. Exports have become a bright spot driving the growth of the industry

In 2022, the domestic market has shrunk significantly, and exports have become the bright spot driving the growth of the industry. According to the statistics of key member enterprises of China Rubber Association, in January ~ October, the export delivery value of the three specialties of tire tire, latex and waste rubber decreased year-on-year, and the rest of the specialties increased significantly, the export rate (value) of the whole industry was 35.67%, and the professional export rate (value) of tires and molds was close to 50%. Among them, the export delivery value of carbon black increased by 60.95%, additives increased by 37.16%, rubber shoes increased by 23.65%, hose tape increased by 23.64%, tires increased by 17.42%, skeleton materials increased by 16.69%, molds increased by 4.54%, and rubber products increased slightly by 0.04%. In the first half of 2022, tire exports accounted for 51.65% of total production, exceeding 50% for the first time, the highest proportion ever. In the case of a decline in total tire production, exports accounted for more than 50%, indicating that export support the operation of the industry. However, after July, tire export began to come under pressure, according to customs statistics, in August ~ November, the tire export volume in that month showed a month-on-month decline, of which the November tire export volume fell year-on-month; In January ~ November, the cumulative export volume of rubber tires increased by 5.1%, an increase of 2.4 percentage points less than the previous 10 months, and the export value increased by 16.4%.

10. The rubber additives and skeleton material industries ushered in their birthdays respectively

70 years ago, in 1952, Shenyang Xinsheng Chemical Plant and Nanjing Chemical Plant respectively built rubber accelerator and rubber antioxidant production equipment, with a total output of 38 tons that year, and China's rubber additives industry was opened. In the past 70 years, China's rubber additives industry has entered a new period of green, intelligent and micro-chemical industry from scratch, from small to large, from large to strong. According to the statistics of the Rubber Auxiliaries Special Committee of the China Rubber Association, the domestic production of rubber additives will reach about 1.4 million tons in 2022, accounting for 76.2% of the world's production capacity, which has the ability to ensure stable global supply and has absolute voice in the world. Through technological innovation and the promotion of clean production technology, compared with the end of the "Twelfth Five-Year Plan", the energy consumption of rubber additives products at the end of the "Thirteenth Five-Year Plan" is reduced by about 30%; The greening rate of products has reached more than 92%, and the structural adjustment has achieved remarkable results; The innovation of cleaner production process has achieved remarkable results, and the overall level of cleaner production technology in the industry has reached the international advanced level. In recent years, new processes in the industry have continued to emerge, such as Yanggu Huatai insoluble sulfur continuous production process, which has reduced production costs and become the third enterprise in the world to master this process; Shengao Chemical's high-content antioxidant, TMQ, using a new liquid catalyst independently developed, developed a continuous flow reactor preparation, and realized continuous production; Weilin New Materials cooperated with Tsinghua University to develop a continuous flow process to prepare the vulcanization accelerator MBTS, which reduced the generation of "three wastes" and improved production efficiency. Comai Chemical developed continuous flow process to produce vulcanization accelerators CBS and TBBS; Shandong Shangshun and Tsinghua University have developed an annual output of 60,000 tons of continuous production of vulcanization accelerator MBT process and will soon put into production, these advanced processes mark the company's continuous progress on the road of scientific and technological innovation. Industry entrepreneurs forge ahead, to create a number of internationally influential enterprises, a number of enterprises scale or single product production and sales ranked first in the world, China's rubber additives industry has entered the world powers, a number of products in the world in the leading position.

In 2002, in response to the development needs of the rubber industry, the Skeleton Material Professional Committee of the China Rubber Association was established. In the past 20 years, the Skeleton Materials Special Committee of China Rubber Association has been committed to promoting the technological progress, greening and intelligent development of the industry, and the skeleton material industry has made rapid development. In 2002, China's steel cord output was 92,000 tons, bead wire output was 155,000 tons, nylon cord fabric output was 236,000 tons, polyester cord fabric output was 18,000 tons; now China has become the world's largest producer and consumer of rubber skeleton materials, and the output of major products accounts for more than 50% of the world. At present, the total domestic steel cord production capacity reaches 3.45 million tons, accounting for about 63% of the world; The total production capacity of bead wire is 1.35 million tons, accounting for about 56% of the world; The total production capacity of nylon cord is about 500,000 tons, accounting for about 52% of the world; The total production capacity of polyester cord is about 420,000 tons, accounting for 53% of the world. The production capacity of the five leading enterprises in each sub-industry accounts for 62%~78% of the total domestic production capacity, which has a high degree of industry concentration. Since the "Thirteenth Five-Year Plan", domestic key skeleton material enterprises have explored and practiced in intelligent manufacturing, many enterprises have carried out intelligent transformation, basically realized the automation of internal transportation, finished product packaging and warehousing management, and some leading enterprises have realized intelligent manufacturing in production links and testing links.