Chinese Tyre Makers Discuss Ballooning Rubber Prices

The China Rubber Industry Association has referred to rising rubber costs as a ‘grim situation’. The CRIA reports that rubber prices, currently approaching RMB 40,000 per ton, have caused tyre production costs to increase by 50 per cent and squeezed profit margins to a record low, with year-on-year profits declining by up to 50 per cent last year. In light of this industry crisis, seven CRIA members met in Beijing on January 13 to discuss possible countermeasures.

Present at the meeting were Hangzhou Zhongce Rubber, Aeolus Tyre, Double Coin Holdings, Guizhou Tyre, Triangle Group and Shandong Linglong Rubber. Representatives from the seven tyre makers broached the issue of skyrocketing raw material costs and the need for market intervention, including a reduction in import duties, to control prices. All seven firms stated they would stop tyre production for two weeks during China’s spring festival holiday, which this year begins on February 3.

Double Coin general manager Chunchen Yue commented that China’s domestic tyre makers today hold a major share of the country’s radial truck tyre market and therefore the collapse of any of these companies would be a great loss to the country as a whole.