Growing rubber sector in China

Rubber sector of China represented by China Rubber Industry Association (CRIA) members experienced increase in sales by 4.4% in 2016. This follows an 11.3% decrease in 2015, according to statements at the 2017 China Rubber Conference held in Guangzhou in March. Several groups of goods experienced fall in sales, among them are: two-wheeler tires, belts & hoses, scrap rubber and carbon black. At the same time, other groups of goods exhibited better year-on-year results. As a result, the overall profit of the sector increased by 11.6% compared with a fall of 17% in 2015.

The recovery is supported chiefly by automotive components and tires, asserts CRIA. Non-tire products exhibit ascending trend, too: from investment to ongoing projects, whereas the growth of tire segment accounts mainly for production volume.

In 2016, tire production volume in China appreciated by 8% (up to 610 million, including 444 million passenger car tires, 121 million truck and bus tires and 45 million bias tires).

According to tire maker, a chairman of Zhongce Rubber Shen Jinrong. some 70% of natural rubber consumption in China goes to tire production. He says that there have been ‘tremendous’ changes on Chinese tire market over the last half a year. Reportedly, these changes led to the swift increase in rubber consumption.

Last September, China introduced stricter rules to regulation of heavy-weight vehicle overloading which, according to Shen, have led to a 30% increase in sales of heavy-weight trucks last year (especially in the last quarter) and more than doubled truck sales in January and February.

Rising price of commodity made distributors, retailers and end users purchase tires, says Shen. Furthermore, anti-dumping investigation of U.S. on bus and truck tire from China increased its export volume before the final determination.

The other factors which contributed to increase in China’s rubber consumption are synthetic rubber’s price (butadiene shortages) and bicycle sector recovery. Shen also warns that such a growth might be transitory even though there is an evidence that it is prolonged by China’s structural reforms and economic recovery.

Article source: European Rubber Journal

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