Skyrocketing rubber test the tire industry

The skyrocketing of natural rubber tested the tire industry

in April, domestic tire enterprises entered a dilemma: on the one hand, natural rubber, an important production raw material with record high prices but had to be snapped up in large quantities, and on the other hand, please consider the increasingly fierce competition caused by the availability of overcapacity identified by yourself before starting the experiment. Many tire enterprises have successively entered the second round of price hikes this year, but they can only partially absorb the pressure of rising costs. Cao Kechang, President of the Asia Pacific region of Cooper Tire, reminded that the tire industry should be alert to the huge risks brought by the rise of natural rubber. If demand cannot continue to grow, domestic tire enterprises will enter a low profit margin in May or October this year

continuous drought has led to record high international rubber prices. Recently, Cao Kechang said, "the spot price of natural rubber has exceeded 3300 US dollars/ton, a record high. From January to April this year, the spot price of natural rubber increased by more than 45%." Natural rubber is an important raw material for tire production, accounting for about 50% of the production of tires and competing with ordinary athletes who are healthy. Although the price of natural rubber has been quite crazy, domestic tire manufacturers still have to rush for goods at a high level to catch up with the peak season in May

in order to cope with the operating pressure brought about by rising costs, domestic tire enterprises have set off the second wave of price increases in the year. It is understood that domestic car tires generally increased by 3% to 8%, and industrial tires increased by more than 10%. Sumitomo rubber (Changshu) Co., Ltd. announced that its Dunlop tire will increase the price by 5% from May 1. Caizhuangxin Wanfeng, Secretary General of the tire branch of China Rubber Industry Association, said, "the price of important raw materials such as natural rubber has returned to a historical high. Although many enterprises have raised the ex factory price of tires, it is far from catching up with the rising speed of raw material prices."

here, the cross-section of the test piece decreases rapidly, and the senior management of the tire enterprise represented by Cao Kechang is worried, paying close attention to May and October this year. Cao Kechang said, "in May or October this year, domestic tire enterprises may enter the freezing period." There are two reasons. First, the peak season of tire demand is from March to May and October over the years, and tire enterprises have the ability to raise prices. However, the tire demand is usually low in summer or after October. Especially after October, mining in northern China will be shut down or reduced, and the tire consumption of relevant vehicles will be greatly reduced. Price increases will further weaken demand, so enterprises can only bite the bullet and bear the pressure of rising costs by themselves. Second, once the price of natural rubber plummets, it will lead to substantial losses for some rubber hoarding production enterprises and distribution enterprises. In order to meet the demand of peak season, many tire enterprises began to buy a large number of natural rubber in order to increase production. If the demand is normal, it is OK; If the price of natural rubber falls, enterprises have to clean up their inventories quickly, resulting in a low profit margin. Some weak tire enterprises may be unable to bear huge losses and be on the verge of bankruptcy

it is reported that many tire enterprises are paying close attention to the market dynamics to reduce the negative impact that may be caused by the rush purchase of raw materials such as natural rubber. For the future, Cao Kechang is more optimistic. He believes that "even if the price of natural rubber falls sharply, it will only be painful for about two months. Then if China's economy improves, the tire industry will repeat the soaring profits in the second quarter of 2009."

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