According to China’s National Bureau of Statistics, tyre production nationwide fell by 21.7 per cent year on year in December to 36.67 million units. This figure, disseminated by Dow Jones Newswire, present a strong contrast to the 14 per cent growth recorded in December 2007. Synthetic rubber production totalled 236,000 tons in December, up 26.7 per cent year on year.
Cuts in rubber exports have begun in the world’s third-largest rubber producing nation. Malaysia’s Plantations Industries and Commodities Minister Datuk Peter Chin confirmed that the government’s plan to reduce rubber exports by around five per cent this year is underway, and it now remains to be seen whether the measure will bring prices out of the doldrums.
“For the first quarter, Malaysia will reduce rubber exports by 22,000 tonnes,” said Chin. “For the whole of 2009, it will be 57,050 tonnes.” Last year Malaysia exported 1.1 million tonnes of rubber. Along with Thailand and Indonesia – the number one and two global rubber producers – Malaysia has committed to removing approximately 915,000 tonnes of natural rubber from the world market. The three countries, which comprise the International Rubber Consortium (IRCo), also say that a reduction of up to 1,345,000 tonnes is possible, but only if prices further weaken.
Indonesia’s passenger car tyre production may prove to be weaker than initially expected in 2009, warns a senior representative from the country’s tyre industry. According to Aziz Pane, chairman of the Indonesian Tyre Producers Association, production may remain unchanged from 2008’s output of 41 million units.
“Initially, we expected car tyre production to hit 45 million units, but after the financial crisis demand is slowing,” he said. Pane added, however, that a recovery is anticipated before the end of 2009. Approximately 80 per cent of Indonesia’s passenger car tyre production is exported, therefore global automotive industry fluctuations are strongly felt by manufacturers.
Vietnam, the world’s fourth largest rubber exporter, is faced with rapidly dropping natural rubber prices as a result of the global recession and the increasing use of synthetic rubber. According to the Vietnam Rubber Association, global tyre production, which accounts for more than half of the world’s rubber supply, is expected to grow more slowly in the years to 2010. Growth of between 2 and 3 per cent is anticipated compared with the 3.4 per cent growth enjoyed in 2007.
Tran Duc Vien, director of the Hanoi Agriculture University, said that current crude oil prices, which have dropped more than 70 per cent since July, are encouraging the use of synthetic rubber, which is in turn causing natural rubber costs to sink. This increased use of synthetic rubber has coincided with Vietnam’s peak latex production period (September to December), and a huge supply of rubber has arrived onto what has become a buyer’s market – in 2007 a ton of natural rubber could fetch US$2,700. In December 2008 this same quantity sold for only around $1,300. Vietnam’s Ministry of Agriculture and Rural Development are forecasting further price drops in 2009.
One of Asia’s premier natural rubber events, the ASEAN Rubber Conference 2009, is to be held between June 18 and 20, in Vientiane, Laos. The promoters describe the conference as a one-stop-centre for the natural rubber industry players to learn, experience and network.
The objectives of the ARC, the organiser adds, is to bring together both regulatory authorities and commercial players of the rubber world to provide updates on current trends and future challenges faced by the naturally rubber industry, to facilitate the exchange of ideas and insight into the global rubber industry and the price discovery of rubber
The Financial Express in India is reporting that synthetic rubber production has fallen in July 2008, compared to the month’s figures a year ago. Output has been measured at 8,186 tonnes, down from July ‘07’s figure of 8,256 tonnes.
In the period April-July, however, more synthetic rubber has been produced compared with the same period last year. 33,439 tonnes have come off the production line, compared with 32,748 tonnes in the same period last year. This 2.11 per cent rise has been matched synthetic imports in the period, jumping from 59,960 tonnes to 76,890. A similar pattern can be seen in the nationwide consumption of the product; the 93,715 tonnes demanded last year between April and July has risen this year to 100,045 tonnes.
Tyre production in China during the month of September increased 6.8 per cent year on year, to 45.6 million units. Synthetic rubber production totalled 170,000 tons during the month, down 5.7 per cent on the previous year.
During the January-September period, tyre output totalled 425.92 million units, an increase of 12.9 per cent year on year, while synthetic rubber output totalled 1.76 million tons, up 9 per cent.
Despite previous reports of factory closures due to raw material supply problems, Goodyear announced on October 3 that it has “no concerns” in this area as its synthetic rubber facilities have returned to operation. The company adds that a return to production was achieved quickly due to the effectiveness of the its Business Continuity efforts. The Goodyear synthetic rubber plants in Beaumont, and Houston, Texas had been closed in advance of Hurricane Ike making landfall on September 13.
Despite taking hits from recent Gulf Coast hurricanes, Goodyear says it has no concerns about raw material supplies for its tire production. The tyremaker said its synthetic rubber plants “returned to operation quickly due to the effectiveness of the company’s business continuity efforts.”
The plants in Beaumont and Houston, Texas, were closed in advance of Hurricane Ike making landfall on Sept. 13. “The short production interruption and minimal business impact resulted from our comprehensive business continuity process, which was enacted in advance of the hurricane’s landfall,” Goodyear said. “In addition, contingencies were put in place to obtain critical raw materials for the company’s tire manufacturing facilities.”
“We’re extremely pleased by the way our Business Continuity process works, and how we were able to quickly get our operations running after the hurricane,” said Bob Keegan, chairman and CEO. “We see the management of this process as a real competitive advantage in these types of circumstances.” (Tire Review/Akron)
Prices for all synthetic rubber grades produced by Dow Europe GmbH have increased by 250 euros per metric tonne, effective October 1st, 2008, or when contract terms allow. Products affected include styrene rubber (SBR) and polybutadiene rubber (BR) products, including cold polymerized emulsion styrene butadiene rubber (BUNA E-SBR), high-cis polybutadiene rubber (BR), low-cis polybutadiene rubber as well as solution styrene butadiene rubber (S-SBR).
Goodyear doesn’t like Ike. The hurricane that struck the Texas, US coastline on September 13 has affected the company’s operations in the area, with operations at three of its petrochemical plants suspended. About 1,000 employees have been unable to perform their duties as a result.
On September 16 the announcement was made that Goodyear has entered into a research collaboration with Genencor, a division of Danish company Danisco A/S, to develop a bio-based process for producing isoprene using renewable raw materials.
Goodyear and Genencor are working on a product called BioIsoprene, a bio-based alternative for the petroleum-derived chemical compound isoprene. BioIsoprene can be used for the production of synthetic rubber and other elastomers. The development of BioIsoprene could, says Danisco, make the tyre and rubber industry less dependent on oil-derived products, such as synthetic rubber made from petroleum-derived isoprene monomer.
The German chemical manufacturer Lanxess expects to see significant growth in its South American operations, in the main thanks to increasing business in Brazil. Marcelo Lacerda, the firm’s Brazil-based operations chief stated to news sources last week that it was all part of the company’s plans.
In Q2 sales in South America grew by more than 10 per cent, thanks largely to its polymers unit, which produces synthetic rubber used in tires. Earlier in the year the company acquired a 70 per cent controlling stake in Brazilian rubber maker Petroflex. Soon it will make a mandatory offer to buy the company’s remaining shares. Lanxess expects Petroflex to provide 35-40 million euros ($52-59 million) this year in pre-exceptional earnings before interest, taxes, depreciation and amortization.
The US Chemical Safety Board (CSB) has announced that it is proceeding with an investigation into the causes of an explosion that occurred in June at a Goodyear rubber manufacturing facility in Houston, Texas. One employee was killed in the incident and several injured, including contract workers who were exposed to hazardous anhydrous ammonia. CSB investigators have already carried out a fortnight of visits to the plant to conduct interviews and accumulate other evidence.
According to China’s National Bureau of Statistics, tyre production across the country in July grew 14.8 per cent over last year, to a total of 49.67 million units. The Bureau’s statistics, reported by Dow Jones, also include figures for synthetic rubber production, which rose 27.7 per cent in July to 194,000 tonnes.
During the months of January to July 2008, tyre production rose 13.5 per cent year on year to 329.32 million units, while synthetic rubber output totalled 1.25 million tones, an increase of 12.2 per cent.
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