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Three factors superimposed, tightening global supply of neoprene

Three factors superimposed, tightening global supply of neoprene

According to Japanese media reports, the tightening of global supply of chloroprene rubber (CR) is becoming increasingly apparent. Japan's domestic neoprene makers pointed out that, at present, not to mention new market demand, even the original user's incremental demand is difficult to meet. There seems to be no good way to improve the supply of neoprene. Because investment costs have been limited by ambassadors' production increase.

The Market analysts have analyzed that the current global supply of CR has tightened, mainly due to the increase in market demand and the superposition of some production lines.

The Market needs

The original demand is recovering and new demands are continuously expanding. The global automotive industry has grown steadily, and the demand for conveyor belts related to the production of mineral resources and high-pressure hoses related to construction machinery has risen significantly.

In addition, the demand for water-based adhesives and latex gloves is also expanding. Because of the good adhesive properties of water-based adhesives, which are mostly used as substitutes for other materials, the demand in the Chinese market is gradually expanding. On the other hand, since CR has an advantage of not causing an allergic reaction due to a protein and a vulcanization accelerator, current gloves manufacturers are often used instead of using a natural rubber latex or the like.

Market supply

Due to the suspension of production of CR manufacturers in China, the start-up of alternative manufacturers is lagging behind, which has an impact on CR market supply. Equivalent to 10% of global demand, production capacity has ceased, and demand has increased at the same time. As a result, the supply of neoprene has fallen into acute tension.

The Investment cost over the ambassador limited production

Industry sources said that in order to resolve the tight supply, it is not easy to increase production investment. It is expected that the investment costs will not be balanced with the market demand outlook. The reason why the investment cost will become a bottleneck to increase the supply of neoprene is because the production cost of the production line remains high, and the investment cost of the CR production equipment using chlorine is even greater.

The cost of maintenance and repair of CR production equipment is higher than that of other synthetic rubber production equipment.

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