Tosoh Chloroprene Rubber Price Increase

Tosoh Corporation's Price Increase Announcement Draws Industry Attention

On August 6, 2025, Japanese synthetic rubber supplier Tosoh Corp. issued a noteworthy announcement: effective September 19, it will increase the price of its sulfur-modified chloroprene rubber, SKYPRENE®. In the domestic market, the price will increase by 120 yen (approximately 5.8 yuan) per kilogram; in overseas markets, the price will increase by $800 (approximately 5,741.2 yuan) per ton, equivalent to a price increase of approximately 5.7 yuan per kilogram.

This price adjustment has garnered widespread attention within the relevant industry, and the underlying issue of the current undersupply of sulfur-modified chloroprene rubber warrants further investigation.

Insufficient Inventory Triggers Supply-Demand Imbalance

Sulfur-modified chloroprene rubber is currently experiencing a tight supply-demand imbalance, primarily due to insufficient inventory in distribution channels. This inventory shortfall is driven by both production halts on the supply side and a surge in demand.

Supply Side: Environmental Pressure Forces Denka to Halt Production, Widening Supply Gap

On the supply side, environmental concerns forced Denka, another prominent chloroprene rubber supplier, to halt production, significantly reducing the supply of related products. Denka's chloroprene rubber plant in Louisiana faced increased operational pressure due to strict emission control standards from the US Environmental Protection Agency (EPA).

In 2024, the EPA issued new standards covering the production of over 200 chemicals (including chloroprene rubber), with only a 90-day compliance period. Although Denka successfully appealed and received a two-year extension to the emission reduction deadline, the combined costs still placed significant pressure on its capital chain.

Earlier this year, Denka decided to "indefinitely suspend" production at the plant, citing "significant cost, production, and other operational challenges." Even the US announcement in July 2025 that the grace period for air emissions regulations would be extended by two years did not change its decision to halt production.

Denka is currently carrying out planned work to restore manufacturing facilities and equipment to a safe state at the plant and to clean up and dispose of hazardous materials. Denka estimates that the closure of the Louisiana plant will reduce its financial losses by 9 billion yen (approximately 428 million RMB) in the new fiscal year (April 1, 2019, to March 31, 2019). The closure has already impacted revenue by at least 900 million yen (approximately 43.79 million RMB) between April and June.

After the closure, Denka plans to meet US market demand from its Japanese plants once the Louisiana plant's chloroprene rubber inventory is sold out. However, this supply shift will not be able to fill the short-term supply gap caused by the production suspension, significantly reducing the global supply of sulfur-modified chloroprene rubber.

Demand Side: The expansion of the new energy vehicle market is driving a surge in demand for synthetic rubber

From the demand side, the expansion of the new energy vehicle market has been the primary driver of the surge in demand for synthetic rubber. The automotive industry itself is a major consumer of synthetic rubber, particularly in tire manufacturing, where demand is robust.

With growing global environmental awareness and strong support from various countries for the new energy vehicle industry, the new energy vehicle market is experiencing rapid growth. The outlook for China's automotive market is positive, with total vehicle sales projected to reach 32.9 million units in 2025, a year-on-year increase of 4.7%. New energy vehicle sales are expected to soar to 16 million units, a year-on-year increase of 24.4%, and vehicle exports are expected to reach 6.2 million units, a year-on-year increase of 5.8%.

The booming development of new energy vehicles has significantly increased demand for high-performance tires. Because new energy vehicles offer high torque and fast acceleration, they place higher demands on tire performance, such as wear resistance and grip.

Sulfur-modified chloroprene rubber, due to its excellent properties, including weather resistance, heat resistance, abrasion resistance, and elasticity, is widely used in the manufacture of seals, hoses, shock absorbers, and other components in the automotive industry, making it a natural hotspot for demand in the expanding new energy vehicle industry.

With the domestic automotive and tire industries maintaining a high level of prosperity, demand for synthetic rubber is expected to continue to rise. However, current production capacity is unable to meet this rapidly growing demand, further exacerbating the supply shortage of sulfur-modified chloroprene rubber.

Industry Challenges and Future Outlook Amidst the Supply-Demand Disparity

In summary, the price increase of Tosoh's sulfur-modified chloroprene rubber is the inevitable result of a combination of shrinking supply and surging demand. With the continued expansion of the new energy vehicle market and the uncertainty surrounding supply recovery, the supply-demand imbalance for sulfur-modified chloroprene rubber is likely to persist for some time.

This will undoubtedly pose numerous challenges to companies in the relevant industry chain. Managing price fluctuations and supply shortages will be a key consideration for companies in the competitive market.