The Rise and Rise of Rubber Prices

Following many financial reports from tyre companies suggesting that sales are up but profits have not necessarily followed suit, it seems that the high price of rubber – cited as a major profit-eating factor – is set to continue its upward momentum in the near future. The Financial Times says heavy rains in south-east Asian rubber growing regions are responsible, having disrupted tapping in the region, thus limiting supply. According to the report, this situation is unlikely to be alleviated until 2012.

Tyrepress.com has reported rising tyre prices frequently over the past year, as manufacturers react to the combination of rebounding demand for tyres and limited and expensive supplies of raw materials. The FT quotes a senior economist at the Association of Natural Rubber Producing Countries, Jom Jacob, who suggests that the “concerns over natural rubber supply are likely to persist until the end of 2011.”

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