Goodyear Strike to Affect Rubber Prices

Goodyear’s position as a leading global buyer of natural rubber means its ongoing strike dispute with the United Steelworkers is likely to affect natural rubber prices, according to analysts at Deutsche Bank. “Since Goodyear buys approximately 10 per cent of the world production of natural rubber, the strike at the company’s North American plants has consequences on raw material prices,” the analysts wrote, adding: “They are currently producing at 40 per cent of their pre-strike capacity (10 per cent at union plants and 100 per cent at non union plants).”

The analysts suggest Goodyear’s lower production level could explain most of the recent fall of raw material prices such as natural rubber. Natural rubber has reportedly fallen 20 per cent in last month alone. While this situation is not expected to last, analysts predict that it will have a “significant positive impact on the earnings of the industry.”