Analysts: High Raw Material Prices Protect Tyre Manufacturer Margins

Following Bridgestone’s recent decision to increase prices in North America, Deutsche Bank analysts have observed that high raw material prices are allowing the leading players to indirectly influence market prices. In their words, Bridgestone’s recent 8 per cent price hike is a “good indication that the oligopoly is working.” The market watchers continued: “Prices are, paradoxically, a good protection on margins.” Assuming that only 50 per cent of these price increases are being sustained within the market, this would allow the manufacturers to offset a 12 per cent synthetic rubber or natural rubber price increase, according to Deutsche Bank.