Raw Material NB Latex for Rubber Gloves Production 100t
Strong Performance Expected with Price Recovery to $1000 per Ton
Expanding Production Capacity of EPDM and Epoxy Resin
Kumho Petrochemical's high value-added specialty expansion, with an investment exceeding 1 trillion won, has entered its final stages. Coinciding with the US-China conflict's ripple effects and the recovery of China's domestic market, it is expected to positively impact the sales growth of key products such as latex.
According to the industry on the 29th, Kumho Petrochemical Group is completing the facility expansions for four products, starting with NB latex, ethylene propylene diene monomer (EPDM), and epoxy resin, and will begin sequential operations from this quarter.
NB latex is a raw material for rubber gloves. Kumho Petrochemical completed the expansion last month, increasing production capacity from the existing 710,000 tons to 1 million tons. This expansion is expected to solidify its position as the global market leader in NB latex.
Especially positive is the fact that market prices are rising at the time of resuming mass production. According to Shinhan Investment Corp., the international price of NB latex dropped to around $700 per ton last year but recently recovered to about $1,000 per ton.
Additionally, the US's announcement of increased tariffs on Chinese-made rubber gloves is seen as a windfall for Kumho Petrochemical. The NB latex produced by Kumho Petrochemical is exported to many rubber glove factories in Southeast Asia, including Malaysia, and the US's tariff imposition on China is perceived as a favorable factor. The US government announced it would raise tariffs on Chinese medical and surgical rubber gloves from the current 7.5% to 25% by 2026.
Earlier, the expansion of production capacity for the major synthetic rubber product, solution styrene-butadiene rubber (S-SBR), coincided with a period of increasing demand. Kumho Petrochemical completed a 60,000-ton expansion of S-SBR in December last year, and demand is rising as the electric vehicle tire market in China is booming.
Kumho Petrochemical's subsidiaries and joint ventures also plan to complete expansions within this year.
Kumho Polychem is investing 294 billion won to expand five lines of ethylene propylene diene monomer (EPDM). Upon completion in the fourth quarter of this year, annual production capacity will increase from the existing 240,000 tons to 310,000 tons. Kumho Polychem is the number one EPDM producer in Asia and the third largest globally. EPDM is a high-performance synthetic rubber with excellent strength, used in automotive bumpers, washing machine tube rubber, and ship cables.
Kumho Mitsui Chemicals, a joint venture with Japan's Mitsui Chemicals, plans to complete the expansion of MDI production facilities, a key raw material for polyurethane, in the third quarter. The company's MDI production capacity will increase from the current 420,000 tons to 620,000 tons, ranking it fourth in the world for a single plant.
Also, Kumho P&B Chemicals is investing 75 billion won to complete a 60,000-ton epoxy resin production facility, used as a raw material for wind turbine blades and coatings, in the second quarter. P&B Chemicals has vertically integrated the phenol derivatives sector, from phenol and acetone to BPA and epoxy resin, achieving world-class competitiveness.
Lee Jin-myung, a researcher at Shinhan Investment Corp., forecasted, "The turnaround in synthetic rubber (SBR·BR) has already begun, and with steady EPDM and the recovery of previously sluggish NB latex, an improvement in performance centered on the rubber business is expected."
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