December 23, 2024

Tire industry benefits drastically reduced efforts to find a solution

The price of rubber has skyrocketed and the cost of innovative manufacturing companies surged
Since the beginning of this year, the price of natural rubber has been rising. At present, the highest transaction price of natural rubber in the bonded area in the country has reached US$3,500 per ton, and last week’s market price in the Singapore market reached US$4,100 per ton, creating a record high. This has resulted in a significant increase in the production costs of tire companies, a substantial drop in profits, and a continuous loss ratio. Rising, facing a serious situation of loss in the entire industry. On April 22nd, China Rubber Industry Association urgently convened nearly 20 tire industry leading enterprises to hold rubber market seminars in Beijing to listen to the voices of enterprises and study measures to deal with the current crisis.
Delegates considered that according to the statistics and predictions of the International Rubber Research Organization, the global supply and demand of natural rubber are basically balanced. Although climatic factors have caused drought in parts of Yunnan and parts of Southeast Asia, they have affected at most 20,000 to 50,000 tons of domestic rubber, which has little impact on the supply of natural rubber. Market speculation has a greater effect on pushing up prices of natural rubber. At present, the trading volume of China's natural rubber futures not only exceeds the Japanese Tokyo futures market, but also the trading value exceeds the value of the futures trading. It is suspected of excessive speculation. Looking at the natural rubber spot market and futures market, not only tire manufacturers and rubber suppliers, but also natural rubber production companies, foreign investment institutions, and various liquidity financial capitals are involved in procurement. The components are very complex. Looking at the large fluctuations in China's natural rubber market several times, it is all related to excessive market speculation.
Fan Rende, president of the China Rubber Association, believes that from the current state of the domestic market, the auto industry will not grow as much as it did last year, and the degree of domestic demand will definitely weaken. Coupled with the impact of the special security case, the tire export situation is not optimistic. In this case, the price of natural rubber is so high that it is obviously abnormal. In recent years, China's natural rubber market has experienced several ups and downs, which has caused great damage to the industry. It not only caused abnormal production and serious losses of tires, but also exacerbated market competition and market irregularity. Unqualified enterprises can not concentrate on improving quality and accelerating technological upgrading, which seriously disrupts the normal and orderly development of the industry. In turn, it also aggravates speculation by domestic and foreign speculators.
Xu Wenying, deputy secretary-general of the China Rubber Association, told reporters that, according to customs statistics, the average price of tires for passenger cars and trucks and passenger cars in China last year was 2,800 U.S. dollars per ton, which included raw material costs, labor costs, and water, electricity and transportation costs; Only natural rubber prices reached $3,500/ton. Tire companies could not offset rising costs even if they raised prices by 10%. According to statistics of 42 major manufacturing enterprises in the China Rubber Association tire branch, from January to March, a total of nine companies suffered losses and their losses continued to rise month-on-month. Inventories rose by 10.4% year-on-year in March and 4.6% month-on-month, and profits, profits, and taxes both declined year-on-year. .
For this reason, tire companies strongly call for national policy support. The first is to reduce the import tariff of natural rubber to a reasonable level. The second is to put the State Reserve glue on the market as soon as possible, keeping the price of rubber flat. Following the sale of the first batch of 30,000 tons of natural rubber by the State Reserve Bureau on April 14th, the State Reserve Bureau tossed another 30,000 tons of natural rubber on April 23, which will put pressure on the rising prices of natural rubber. . It is understood that the State Reserve Bureau expects that the total amount of thrown reserves will reach 100,000 tons. However, companies believe that the State Reserve Bureau's plastic injection should be aimed at production companies rather than rubber suppliers in order to stabilize the price of rubber. Third, the state should issue the “Tire Industry Adjustment Policy” as soon as possible. At present, the tire industry is now a new round of investment, will inevitably exacerbate market competition, the timely introduction of the policy can properly inhibit the tire industry blindly expand the status quo, and promote the healthy development of the industry.
In addition, the tire companies participating in the meeting also reached a consensus that companies must unite and respond to the new situation with new ideas and ways of thinking. At present, natural rubber accounts for a high proportion of tire costs. Enterprises must increase their technological content, adjust product formulas, etc., and reduce their reliance on natural rubber. At the same time, they must do more exploration on alternatives. Relies on technological innovation. Taking the road of low carbon and environmental protection, we can reduce energy consumption and reduce costs from product design, formula design, and process equipment, so as to ensure long-term healthy development.
Fan Rende said that in the face of such a severe situation, the association should also make a difference. It should refer to the form of the Southeast Asian Rubber Federation and try to establish a loose rubber procurement alliance in the industry to change the status quo of domestic and offensive individual procurement. Major rubber-producing countries conduct regular dialogues and sign framework agreements to discuss the possibility of establishing a long-term contract (year) and short-term contract (quarter) to ensure a stable source of rubber procurement. He said that the consumption of natural rubber in China accounts for almost one-third of the total production of rubber produced in Southeast Asia. It should have the right to speak. The rubber-producing countries also hope to maintain a balanced and stable supply price to build a healthy natural rubber. market. We can take advantage of the three major rubber-producing countries to strengthen dialogue with China to maintain price stability as the main content, and strengthen dialogue and exchanges. This will play an active role in changing the status quo of China as a large rubber importer without price discourse.
Fan Rende reminded enterprises that the country’s recent real estate regulation and control will increase the liquid financial capital in the market, and it will likely enter the natural rubber futures market and cause the natural rubber market to fluctuate. This unpredictable factor deserves industry attention and vigilance.

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