Blog

2018

Analysis of the new policy for mixed rubber

Author:

A "General Technical Self-discipline Specification for Mixed Rubber" has been circulating in the market these days. Some people exclaimed that mixed rubber is finished, while others said that this kind of thing is not painful or itchy. After reading it, I have some small feelings and want to write it down.

First of all, this document is real, otherwise you can go to the website of the China Natural Rubber Association to check. In fact, whether a document has an impact on the market depends on who issued it. There are two stamps on the document, the China Natural Rubber Association and the China Synthetic Rubber Industry Association. Although both of them are prefixed with the Chinese character "Zhong", after reading the introduction of the association, they are all considered non-governmental organizations, so many people think that this kind of thing has no legal effect and has no impact on the market. Here, the "General Technical Specification for Composite Rubber" must be compared, because the past and present of mixed rubber also had this coding spring after the implementation of the new standard for composite rubber. The details will be discussed later. The standard for composite rubber was officially issued on December 31, 2014 by the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China and the National Standardization Administration in Announcement No. 33 of 2014. The standard defines compound rubber as "a uniform mixture of raw rubber and compounding agents such as carbon black and silica (white carbon black)". When tested according to ISO9924, the raw rubber content in the compound rubber should not be greater than 88% (mass fraction). At that time, the regulations were to be officially implemented from July 1, 2015, but the customs and commodity inspection did not issue formal documents with strict requirements. In addition, due to the demands of major tire companies in Beijing, the time was postponed for another 6 months and officially implemented on February 1, 2016. Regardless of the content of this policy, the publisher is the General Administration of Quality Supervision, Inspection and Quarantine and the National Standardization Administration. What is the result at the national level? Since the new policy in 2016, Qingdao Free Trade Zone has only imported one batch of compound rubber. In other words, no one imports compound rubber. What I am more curious about is that this technical specification of mixed rubber is a self-discipline specification. So who is required to be self-disciplined by self-discipline, and who drafted it? A closer look shows that they are all industry giants. Since it is a self-discipline specification, should the drafters be the first to comply? If not, wouldn’t this specification be a dead letter? If these industry giants comply with the self-discipline specification and really stop importing, what will happen to the market? What’s more interesting is that this document stipulates an execution time of August 18, which will be announced on August 4 and implemented on the 18th. What about the long-term futures ordered by sea before? So whether this document is useful or not, everyone can know whether it is true as long as they keep an eye on the drafters. If they don’t comply, what credibility do they have?

Secondly, this document still has some positive significance. It puts forward a definition of mixed rubber. Recently, major customs across the country have been very strict in inspecting mixed rubber. In the final analysis, what is mixed rubber and how to inspect mixed rubber is a very headache for customs. This document explains in detail the definition, classification, composition, inspection methods, and requirements of foreign customers of mixed rubber. Here comes another question: how does our customs define mixed rubber? The import code for mixed rubber is now 40028000. The customs code is generally divided into two levels. First, look at 4002. In the General Administration of Customs, the meaning of the code 4002 is synthetic rubber and ointments extracted from oils, in primary forms or plates, sheets, and strips; mixtures of products listed in heading 40.01 and products listed in this heading, in primary forms or plates, sheets, and strips. In fact, it is not difficult to see that the main meaning of 4002 is synthetic rubber, but it is followed by a sentence that a mixture of item 4001 and this item is also possible. As we all know, 4001 is the natural rubber code, so it can be simply understood that 4002 can also be a mixture of natural rubber and synthetic rubber. After 40028000 is entered, the customs displays it as a mixture of products listed in tariff item 40.01 and products listed in this tariff number. Therefore, the method of adding natural rubber to synthetic rubber is completely OK. The problem is how to detect the content? This is the most troublesome problem for customs, and it is also the most troublesome problem for traders and factories. No one can explain clearly how to distinguish the content of mixed rubber. Everyone is just swallowing it whole. This time, the self-discipline regulations gave an answer, which is to use the nitrogen content to distinguish. Whether this method is effective or not, we don’t know because we are not technical, but in any case, this is an important reference method. The self-discipline document also stipulates the cost ratio of mixed rubber, requiring a 50-50 split, which is a bit difficult. The Customs' Note 5 on the General Interpretation of Rubber says: Note 5 to this chapter stipulates the criteria for distinguishing between non-compounded (items 40.01 and 40.02) and compounded (item 40.05) primary shapes, plates, sheets or strips of rubber or rubber mixtures. This note does not distinguish between compounding before or after coagulation, and allows rubber or rubber mixtures of items 40.01 and 40.02 to contain certain substances, as long as these rubbers or rubber mixtures still retain the basic characteristics of the raw materials. The substances allowed to be contained include mineral oil, emulsifiers, anti-adhesive agents, small amounts (generally not more than 5%) of emulsifier decomposition products, and very small amounts (generally less than 2%) of special additives. 5% and 50% I think this non-governmental organization should not be able to influence the customs, and the shape cannot be influenced. This can only be said that the non-governmental organization has given an opinion, but whether it can be implemented is unknown. At the same time, I believe that according to the current processing level of Southeast Asian processing plants, they cannot do it.

Finally, whether the issuance of this document will have a huge impact on the market still depends on the subsequent implementation. A simple document from a non-governmental organization cannot constrain the market, but it provides a clear definition and testing method. Whether this will be recognized by the customs requires special attention. In fact, I believe that the customs will not even look at the content and appearance. However, the nitrogen content testing method is a good attempt for the customs. Assuming that the customs performs the test according to this standard, how many mixed rubbers on the market can withstand scrutiny? Of course, everything is just a hypothesis, so let's wait and see.