Imports
In a letter to President Obama, David Hartquist, executive director of the Committee to Support US Trade Laws (CSUSTL), encouraged the President to support a petition brought by the United Steelworkers union.
Maxxis-sponsored Team Japspeed experienced success with driver Danny Eyles winning Round Three of the Prodrift Super Series at Donington (held back on 8 August), setting up an exciting series climax to be held at the end of the week (6 September).
Recent positive economic indicators coming out of Europe, Asia and the US have given analysts reason to forecast a recovery in the global logistics industry. However for global freight and parcel volumes and revenues to rebound significantly – and therefore the tyre sales which rely on logistics firms’ prosperity – analysts at Datamonitor suggest there will need to be “major improvements in consumer confidence, industrial output and subsequent international trade volumes.”
During the first half of the year Chinese market sales of Cooper Tire & Rubber’s passenger car tyres increased 40 per cent, beating the company’s own 34 per cent target. Truck and bus tyre sales, which account for 65 per cent of Cooper’s China business, grew by double digits in the first half.
As Reuters notes, the decision as to whether or not the US will impose tariffs on Chinese made consumer tyres is not a straightforward one. As the news service pointed out on August 26, Chinese trade sources indicate that these tariffs may not line up with a safeguard mechanism China agreed to when it joined the World Trade Organisation.
China's natural rubber imports jumped 25.8 per cent to 165,876 metric tons in July. Malaysian news sources cite customs reports that show the figure is close to an 11-year high which last peaked in March. China buys rubber from main producers Thailand, Indonesia and Malaysia, as well as Vietnam, Cambodia and West Africa. The high comes off the back of China’s strong passenger car sales in July, which jumped 70.54 per cent from a year ago.
On 14 August, the European Commission began an investigation into the alleged ‘dumping’ of Chinese-made aluminium wheels into the European market. The investigation followed Association of European Wheel Manufacturers’ (EUWA) June complaint that the practice has been taking place. “Having determined that there is sufficient evidence to justify the initiation of a proceeding, the Commission hereby initiates an investigation,” Reuters quoted the journal of the executive arm of the 27-nation European Union as saying. China's Ministry of Commerce denied the charges saying: “It raises the cost of repairs for customers, affects the recovery of the European auto sector from the global financial crisis, and hurts the interests of both China and Europe'” in a statement on the Ministry's website.
The tyre manufacturing downturn in North America has claimed another victim. Bekaert has announced the closure of its Clarksdale, Mississippi bead wire plant. According to plant manager Gary Downey, the quantity tyre imports entering the US, and their affect on North American tyre production, has played a role in the decision to close the plant and eliminate 76 jobs. Production from Clarksdale will be integrated into Bekaert's Rome, Georgia, and Shelbyville, Kentucky facilities in the coming months.
Tire Group International (TGI) has released a statement outlining a USA based exporter’s point of view” towards the International Trade Commission (ITC) ruling on imported Chinese passenger car and light commercial vehicle tyres. In this statement, TGI indicates it will continue to fight the ITC ruling and says that, after meeting with several state representatives, senators, and following phone conversations with the assistant secretary of Import Administration, the company is able to “shed light on the effect this ruling will have on re-exporters” such as itself.
The United Steelworkers (USW) union wants make its case for restricting Chinese tyre imports and has requested an appearance before the US Trade Representative (USTR) public hearing scheduled 7 August. The USW advocates strong enforcement of a US trade law. Last month, a majority vote of the ITC reportedly found that “tariff relief was needed to urgently reduce tire imports,” say the steelworkers. However, trade associations including the TIA have questioned the effectiveness of such measures.
USW President Leo W. Gerard said: “Our nation’s job loss numbers at tyre factories dramatically understate the impact China’s flooding imports have caused in the communities where our represented workers live. The consequences of lost tyre production jobs have extended to many thousands of other jobs in supporting industries and suppliers that have also been lost.”
The New Indian Express newspaper has reported a “severe crisis” looming over India’s tyre and tread rubber manufacturers. According to the newspaper, carbon black supplies are critically low and the four major Indian manufacturers of the substance lack the capacity to meet domestic market demand. This problem is compounded by allegations that India’s Ministry of Commerce is preventing the importation of carbon black to compensate for this shortfall.
A number of factories are said to have been idled as a result of this shortage, which The New Indian Express attributes to a Ministry of Commerce decision to restrict carbon black imports if the landed cost is less than RS 80 (£1.00) per kilogram, markedly more than the current Indian price.
Duties of up to 55 per cent may be imposed upon Chinese tyres imported into the US in an attempt to reduce their effect on local manufacturers. On June 29 the US International Trade Commission ruled 4 to 2 in favour of imposing tariffs upon passenger car and light commercial vehicle tyres imported from China for a three-year period. Proposed duties for the first year have been set at 55 per cent of the tyre’s value, while in the second and third years the rate would drop to 45 and 35 per cent respectively. These tariffs would be charged on top of the current rate of duty.
In a somewhat unexpected change in direction the US International Trade Commission will recommend a series of duty increases on Chinese-produced passenger and light truck/SUV tyres exported to the US. Monday’s decision, which is being forwarded to President Obama for his consideration, would place a three-tiered additional duty on the tyres based on their value – 55 per cent in the first year, 45 per cent in the second year, and 35 per cent in the third year. The fees would presumably make the retail cost of Chinese tyres more expensive in the US.
The duty plan was not sought by the United Steelworkers, which petitioned the government for a rollback in the number of consumer tyres imported from China. On June 18, the ITC ruled in favor of the USW by a 4-2 vote. That same 4-2 majority made the duty recommendation. In addition to the duty, the ITC recommends that the President direct the US Department of Labor and the U.S. Department of Commerce to provide expedited consideration of Trade Adjustment Assistance for firms and/or workers that are affected by the imported tyres. (Tire Review/Akron)
Pelmar Engineering has announced that it is coordinating the sale of Dunlop Nigeria’s tyre manufacturing plant and machinery. According to the company, the equipment is suitable for car, light van, truck and farm tyre manufacturing for tyres of both radial and cross-ply construction. The machinery was reportedly used in the full production of tyres for OE and replacement market until the end of 2008.
“In 2004 Pelmar sold the equipment to Dunlop Nigeria. It was completely reconditioned prior to installation and running in by the middle of 2005,” said Hagai Peled, senior VP and COO of Pelmar, adding: “The equipment is in excellent condition, hardly operated and offers our customers a rare opportunity to buy high quality equipment with the Pelmar assurance of quality.”
Dunlop Nigeria ended local production in April less than four years after the decision was taken to invest an estimated 6.5 billion naira (£29.4 million) on radialising plant technology. The company, recently renamed DN Tyre & Rubber Plc, now imports its tyres from South Africa.
India’s national budget is due to be delivered on July 6, and the nation’s tyre manufacturers are hoping that a sought after reduction in natural rubber duty will be forthcoming. “As in the past we are looking forward to the correction of the inverted duty structure,” said Rajiv Budhraja, director-general of India’s Automotive Tyre Manufacturers Association (ATMA). “That is the first and foremost demand.”
According to a Reuter’s news brief, the ATMA has requested the government reduce the customs duty on natural rubber to 7.5 per cent; previous news reports indicated the ATMA was seeking a 10 per cent duty. Regardless of the desired rate, the association’s goal is to provide manufacturers some relief from what is seen as an unfair tax structure. While natural rubber currently attracts a customs duty of 20 per cent, the tax on imported finished tyres is only half that.
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