Raw material prices have declined, and the rubber additives market remains in a wait-and-see stance.
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2021-07-02
According to industry-wide statistics, the rubber chemicals sector faced significant challenges in the first half of 2020, particularly amid a sharp decline in product prices. In the second half, as market demand picked up, overall operations improved markedly, with some facilities even operating at full capacity in December, leading to a rapid recovery in industry profitability.
Due to last year’s low base and the industry’s continued upward momentum from late last year into the first quarter of this year, growth was substantial. According to Yanggu Huatai’s Q1 report, the company’s order book is fully booked and its production lines are operating at full capacity, generating revenue of RMB 589 million, up 44.30% year over year (the same below); net profit attributable to shareholders of the listed company reached RMB 88.625 million, a surge of 1,719.56%. However, in 2020, Yanggu Huatai reported total operating revenue of RMB 1.943 billion, down 3.52%, and net profit attributable to shareholders of the listed company of RMB 126 million, down 31.77%. Consequently, based on the listed company’s financial data, the rubber additives industry as a whole is expected to perform better this year than it did last year.
According to statistics from the China Rubber Industry Association, in January–February, member enterprises recorded sales revenue of RMB 3.635 billion, up 33.42%; total output of rubber chemicals reached 225,800 tonnes, an increase of 35.32%; export delivery value rose by 46.51%, and the export ratio (by value) stood at 29.37%, up 2.62 percentage points.
Analysts predict that China’s economy this year will follow a “high‑first, low‑later” pattern, with growth decelerating quarter by quarter. Accordingly, rubber‑chemical manufacturers expect the industry’s outlook to stabilize going forward. At the same time, companies note that, amid rising market uncertainty and heightened risks, end‑user firms should not rely solely on lower raw‑material prices to boost profits; instead, they should strive to capture value from the market, cultivate strong supplier relationships, and forge strategic partnerships to achieve mutually beneficial development.

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