Natural rubber costs hurt China, too

Jan. 17, 2011

With consumer tire shipments from China down 27.6% in 2010 vs. 2009, and raw material prices -- especially natural rubber -- continuing to rise, it's not surprising to hear reports that tire manufacturers in the People's Republic of China are having a rough go of it.

A report out of the "Global Times" says that the increase in rubber prices has "made it hard for China's tire industry to survive." (The "Global Times" is a subsidiary newspaper of the "People's Daily," published in Beijing, China.)

Deng Yali, vice-chairman of China Rubber Industry Association, is quoted as saying that rubber prices rose more than 80% in 2010. As a result, Chinese tire manufacturers suffered a decrease in profits.

The report puts rubber consumption into perspective by claiming that China uses one-third of the 9 million tons of rubber used worldwide on a yearly basis.

Chinese consumer tire exports to the United States totaled 31.1 million units in 2010, down from 43 million in 2009, according to the 2011 Modern Tire Dealer Facts Issue. That was still good for the top spot among passenger and light truck tire exporters to the U.S.

On Sept. 26, 2009, the 4% tariff on Chinese consumer (passenger and light truck) tires was increased to 39%. On that same day in 2010, it was reduced to 34%.

To read the news item (in English), click on the "People's Daily."