Polychloroprene Rubber: Global constraints affecting industry?

As our valued client, Royal Adhesive Industries strives to keep you up to date with the latest news. The Chinese Government is putting policies in place to protect the environment reducing emissions in all manufacturing sectors with a knock-on effect on all the major manufacturing industries including adhesives.

How has Polychloroprene Rubber been affected?

Polychloroprene Rubber

The use of contact type adhesives covers many industrial applications. Polychloroprene Rubber is the base polymer of contact type adhesives and the Chinese Government’s environmental policy has set a chain of events in motion resulting in a limited available volume of Polychloroprene Rubber.

An affected global manufacturer producing up to 30 kilotons of polychloroprene rubber a year in line with the emissions plan led to the sudden removal of this resource from the global marketplace. This was the start of the volume constraints with other manufacturers been unable to pick up this shortfall due to capacity constraints and limitations of their own ongoing annual maintenance shutdowns further impacting availability.

These volume constraints in China opened up a market willing to pay higher pricing as larger Asian and European manufacturers redirected their available volumes to China to meet the new demand. The abandoned markets of the major producers opened up demand for smaller manufacturers to supply these desperate markets as a result of this redirection. The result? Global pricing increases in line with supply and demand in the Asian market.

Royal Adhesives solution to the Polychloroprene constraints

The South African marketplace recently felt the effects of the initial redirection however Royal Adhesive Industries had taken steps to maintain our supply in order to support our responsibility to our client base as best we could. This meant securing a volume of Polychloroprene Rubber without a price indication. A risky, but necessary move assisting in minimizing the impact of not having stock and thereby allowing us to maintain an uninterrupted, yet constrained, supply of contact adhesives for our customers.

We have been informed, that to expect any major price corrections in the global marketplace soon is unlikely as expansion of capacity at some manufacturing plants may only come online in 2019. Taking a longer-term view on pricing indications are that they will remain tight for the remainder of 2018, with possible easing depending on availability of volume via capacity expansion from some producers to factories, coming back online.

As an existing loyal client of Royal Adhesive Industries, you can rest assured our team will continue to be driven in sourcing and supplying adhesive to our customers through these turbulent times.

Contact us for all your adhesive needs.