Tire industry calls for state intervention in rubber prices

In the past few days, the international natural rubber price has continued to skyrocket. On October 11, 2010, the spot price of natural rubber rose to RMB 29,300 per ton, and the price of natural rubber futures rose to RMB 29,600 per ton on October 12. A record high. Under such circumstances, tire manufacturers have become overwhelmed. Many large-scale tire manufacturers urgently appealed and hoped that the government would intervene and take necessary measures to promptly contain the soaring prices of international natural rubber and help companies tide over the difficulties.

According to industry insider analysis, this round of international natural rubber prices rose sharply. Although Hainan suffered heavy rain and other reasons, it did not rule out the artificial operation of international traders and drove up prices. From the perspective of demand, in the first three quarters of 2010, the demand for raw materials from the automotive industry and domestic tire companies increased. At the same time, as the world economy began to emerge from the international financial crisis, the auto industry of the United States, Japan, Russia and other countries had Demand is also increasing. In this context, some man-made operations have exacerbated the global supply and demand of raw rubber.

Natural rubber is the main raw material for tire production and accounts for about 50% of its production costs. Since 2010, production costs have risen sharply, and tires and other rubber companies have seen their profits decline. From January to August, 9 out of the 43 companies in the China Rubber Industry Association’s tires division recorded a loss of 20.9%. If this trend is allowed to continue, there will be a potential loss for the entire industry in 2010. At the same time, the imposition of a high tariff of 20% on imported natural rubber has also plagued the development of China's rubber industry. At present, the annual output of domestic natural rubber has been hovering around 600,000 tons. The domestic natural rubber has an external dependency of up to 70%. Constrained by continued price hikes in raw materials, domestic tire companies generally feel sorry for their days.

To this end, tire companies called for the relevant state departments to issue countermeasures as soon as possible, take necessary measures, and resolutely curb the trend of soaring imports of natural rubber, to support the healthy and steady development of China's tire industry. The enterprise suggested that after the National Materials Reserve Bureau of the National Development and Reform Commission took out two 100,000 tons of reserve rubber in the first half of the year, it should now use another 100,000 to 150,000 tons of reserve rubber to conduct futures auctions. At the same time, it learned from the practices of some countries and adopted as soon as possible. Import tariffs on natural rubber dropped from 20% to zero.
In the current situation where production costs have risen sharply, prices for tire products have been difficult to raise prices, and exports have encountered multiple obstacles, relevant members of tires clubs have reminded companies to start emergency plans, adjust production plans, compress production targets, balance rubber consumption, and resolutely suppress backward production capacity. Or stop production to ensure that raw material resources are used in products with market and profitability; at the same time, enterprises must increase technological transformation to realize skills tapping potential and reduce costs.

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