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Recently, the China Rubber Industry Association convened an emergency meeting of more than a dozen business representatives from the industry and experts in related fields to jointly discuss countermeasures against the rise in natural rubber prices. According to industry analysts, the substantial price hike of natural rubber is mainly due to the decline in production of the main producing areas due to the weather and the increase in tire production that led to an increase in demand. In the near future, natural rubber prices will continue to rise, and tire manufacturers will also face raw material shortages.
The price of natural rubber has led to a rapid increase in prices. According to Zheng Yongxiang, deputy director of Shandong Rubber Industry Association, the world's rubber production areas include Brazil, Thailand, Malaysia, Indonesia and other countries, and parts of China's Yunnan, Guangxi, Guangdong, Hainan and Fujian. . “China is a big country in the world of rubber production and a big consumer country. The domestic rubber production is about 500,000 tons. The annual import of natural rubber accounts for more than 70% of the total domestic demand, of which more than 70% of the natural rubber is used in the tire industry. on."
Since the beginning of this year, due to dry weather in major provinces such as Yunnan and the delay in rainy days due to rainy weather in major production areas such as Thailand and India, natural rubber production has decreased compared to previous years, and natural rubber prices have risen rapidly in the second half of this year. As a result, the cost of tire manufacturing companies has increased.
At present, the monthly consumption of natural rubber by tire companies in Shandong Province exceeds 100,000 tons, and the estimated annual consumption is about 1.7 million tons, accounting for about half of the country's natural rubber consumption. Most of the natural rubber sources of Shandong tire manufacturing enterprises have established a fixed channel, including importing directly qualified companies for production and distribution to other companies, or have their own rubber production bases in Thailand and other countries. However, companies that have their own natural rubber production bases overseas only account for a small percentage, and most companies still rely on imports.
Xing Zheng, natural rubber analyst at Luneng Jinsui Futures, said that dry weather occurred in the rubber-producing regions such as the southern provinces of China, as well as the production of new production capacity by some tire manufacturers. This led some traders to think that they had a chance to enter the natural rubber industry. In the market, “a large amount of money has flooded into the natural rubber futures market, driving up prices, and the futures prices have further affected the spot market for natural rubber, which has also driven up the spot market price.â€
Taking the rubber 1105 of the Shanghai Futures Exchange as an example, the lowest price on June 8 was 20055, and since then the price has risen. On November 10, it reached the highest value of 38,400 yuan. Although the price dropped slightly before November 14, it still hovered around 34,000 yuan, up from 69.% in early June.
Some tire companies show signs of losses. Fan Rende, chairman of the China Rubber Industry Association, said that the current high prices of natural rubber caused tires business difficulties, may be said to be the most difficult time in history, the benefits of tire companies have been reduced to a minimum level, low profitability At 3%, companies cannot operate. According to the current development trend, the profitability of many companies will fall below 3%. This situation must cause the government, associations, and enterprises to pay close attention.
“In addition to the natural rubber price, the RMB exchange rate is gradually increasing and trade barriers are getting more and more serious. It is predicted that the tire industry will face very severe tests in the next two years,†Fan Rende said.
Shandong currently has more than 4,000 rubber processing companies and consumes more than half of the country's rubber. Among them, there are more than 500 motor vehicle tire production enterprises that consume the largest amount of natural rubber, and the output has been ranked first in China since 1985, accounting for nearly 50% of the total national production.
Zheng Yongxiang said that in addition to the price increase of natural rubber, Shandong tire manufacturers are also affected by rapid increase in production capacity, profit decline, disorderly industry competition and export restrictions and other aspects, some companies have shown signs of loss.
While natural rubber prices are rising, tire manufacturers in Shandong continue to maintain a rapid increase in output. Zheng Yongxiang said: “The current status of the tire industry in the country is that there are many manufacturers and large production volumes. Tire production is increasing throughout the country. Shandong tire production continues to maintain an annual growth rate of more than 30%, resulting in a surge in rubber consumption, resulting in prices. rising."
Since the beginning of the rise of natural rubber last year, Shandong has added many tire manufacturers, which has led to an oversupply of local tires and excessive production capacity. Some of the original production of other rubber products, and even rubber-derived chemical products also turned to the production of tires. In addition, some companies outside the natural rubber industry are also entering the field of tire production. For example, some real estate companies have entered the tire industry due to real estate regulation and other reasons. Paper-making companies have also entered this field.
Industry sources said that with the limited supply of natural rubber, the rapid expansion of tire production capacity led to a sharp contradiction between the supply and demand of raw materials. “Some tire manufacturers have to purchase natural rubber from traders at a high price. As a result, the production cost will rise a lot, which will affect the profits of the company,†said Zheng Yongxiang.
Experts recommend multiple measures to ensure the supply of raw materials Some experts and industry experts said that the current domestic tire industry, the phenomenon of disorderly competition, natural rubber, foreign dependence is too high, the tire industry and enterprises still need to work from many aspects to protect the interests of the industry.
First of all, we should make full use of the two major functions of price discovery and risk avoidance in the futures market. We must rationally arrange spot purchases and production and sales plans based on changes in futures market prices, and evade the risk of skyrocketing prices and plunge through the futures market to achieve the effect of hedging. Zheng Yongxiang suggested that in the current situation where natural rubber prices are too high and companies face losses, they can tap potentials in production, technology and management, save energy and reduce consumption, increase labor productivity, and use cheaper raw materials under the premise of ensuring product quality. .
Second, relevant incentive policies should be introduced to increase the output of synthetic rubber and increase the cultivation of other natural rubber crops. Zheng Yongxiang said that there are many types of synthetic rubber, one of which is based on the molecular structure of natural rubber, which can partially replace natural rubber and is 20% cheaper than natural rubber. The state should increase support and increase the output of synthetic natural rubber.
Cai Weimin, secretary general of the Rubber Industry Association’s tire branch, said that it is recommended that tire companies adjust their tire prices in a timely manner. This is the most direct and most effective way to absorb the price increase of rubber raw materials. As raw material prices have risen sharply and tire prices have been raised, according to the law of market prices, timely adjustment of tire prices should become a conscious action of all companies. Secondly, enterprises should adjust their production plans in a timely manner depending on the situation, limit production or press production, and eliminate backward products. This can not only increase the effective utilization of natural rubber and other raw materials, but also balance the existing tire market and compress tire inventory. In addition, internal management is strengthened, energy conservation and emission reduction are reduced, and production costs are reduced.
Recently, the price of natural rubber has skyrocketed and it has reached the highest level in history. This has caused some domestic tire manufacturers to suffer losses.