The recent skyrocketing prices of natural rubber all over the world have caused the tyre industry in China, the world’s largest consumer of natural rubber, to be in trouble.

China Rubber Industry Association urges the State Reserve Bureau to relocate its reserve rubber

The recent skyrocketing prices of natural rubber all over the world have caused the tyre industry in China, the world’s largest consumer of natural rubber, to be in trouble. Recently, the reporter learned from the China Rubber Industry Association tire branch that tire companies are brewing price increases, or up to 8%.

Tire companies have faced an impasse

Cai Weimin, secretary general of the tire division of the China Rubber Industry Association, said that in the first nine months of 2010, the cost of finished goods for 43 companies in the Tire Division’s statistics rose by nearly 30%, and profits have dropped by 20.6%. “In recent days, the rubber market has become increasingly The more severe, there is a rising trend, tire companies have already struggled."

Cai Weimin said that as industry associations, they are strongly appealing to the relevant departments such as the State Administration of Taxation to abolish the import tariffs on natural rubber as soon as possible to reduce the burden on enterprises and help enterprises tide over the difficulties; at the same time, they plead with the State Bureau of Materials Reserve to provide 100,000 to 150,000 tons of reserves as soon as possible. Rubber auctions to curb the rise in natural rubber prices and stabilize market prices.

In April 2010, the State Material Reserve Bureau had twice sold off a total of 60,000 tons of reserve rubber. Now the tire companies hope that the National Bureau of Materials Reserve will be able to make another shot. Deng Yachen, secretary-general of the China Rubber Industry Association, told the Morning Post reporter that the association has reported this request to relevant departments and has paid great attention to it.

At present, the relevant departments are asking the association to organize more investigation materials.

Cai Weimin told reporters yesterday that due to the substantial increase in raw material costs, tire companies are currently brewing prices, and the average increase is expected to reach about 8%. Some companies even put forward: “Now we have reached the critical moment of corporate survival, and we hope that some companies will not wait and see. We must take timely adjustment of tire prices as a conscious action.”

It is understood that there are currently some companies with better cost control still waiting to see if they want to take advantage of other people's price increases, they do not rise or rise, in order to compete for more market share.

This displeased the already troubled companies and called for the whole industry to raise prices together. Some companies even believe that even if the tires price increase of 8%, plus 6% in the first half of 2010, the cumulative increase in tire prices is still less than the increase in natural rubber prices.

"The fourth quarter will be very bad."

Cai Weimin said that if the tire companies do not have stocks of raw materials at present, it is basically unprofitable to purchase tires at current natural rubber prices and produce tires. There is a bit of inventory, and now is "apologized to Feng," and if natural rubber continues to increase prices, tire companies in the fourth quarter will be very bad days.

Recently, TOCOM rubber futures in April rose 1.4 percent in intraday trading to $ 4525 / ton, the highest in 30 years in February 1980 a new high; the contract since 2010 have risen 34%. At the same time, the May futures rubber futures on the Shanghai Futures Exchange rose 2.8%, hitting a record high of 38,400 yuan/ton during the session. The contract rose for the eighth consecutive trading day.

In October 2009, the spot price of natural rubber was only RMB 16,000/ton.

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