Latest News

RUBBER NEWS INT'L: Shortages, price increases likely after EU tariffs on Chinese truck, bus tires
(Last Updated: 21 Jun 2018)

 

 

Shortages, price increases likely after EU tariffs on Chinese truck, bus tires

Comments Email 

 

 COLOGNE, Germany—Europe's truck and bus tire market is likely to see shortages and face increased prices into early next year as a direct result of the European Union's recent imposition of provisional tariffs on Chinese tires.

"With the anti-dumping tariff situation that we have right now, a lot of the orders in the last quarter have stopped," Stephan Helm, chairman of German tire retail trades association the BRV, said at the Future Tire Conference, held May 30-31 in Cologne.

Helm, who also is managing director of the Reifen Helm Group, expects the shortages to show up in third and fourth quarters this year. He also believes the shortages would impact both the budget and premium brands.

Low-cost Chinese tire imports have had the greatest impacted the retreading industry, which Helm said has seen an almost one-on-one relationship between increases in Chinese tire imports and decreases in the retreading market for EU suppliers.

"We are expecting (an impact) mainly on the retreading sector, and we expect increases in prices," Helm said. "If you take it all over Europe, it was 4 to 4.5 million imports from China and (there is) about 1 million stocked at the wholesales. So, this year, we are around 3 million units missing, and I don't think we can compensate for that. We will get some shortage to the end of the year, maybe the start of 2019.

"Then we will see changes as molds are brought from China to other locations and a change in the production situation. Then, I would say, stabilization."

Rubber industry eyes sustainability

Update: June, 15/2018 - 09:00
 
Rubber latex being processed for automobile tyre production at the MTV Rubber JSC in the central province of Quảng Nam. — VNA/VNS Photo Đỗ Trưởng
Viet Nam News

HCM CITY — The Vietnamese rubber industry is targeting sustainable development in addition to trademarks development and higher-quality products, speakers said at a seminar held on June 14 in HCM City.

Trần Thị Thuý Hoa, head of the rubber industry development board under the Việt Nam Rubber Association, noted that the industry and the association were working on sustainable development solutions.

Rubber companies today are expected to not only make profits but also contribute to society and maintain sustainable growth, she said.

International certificates on sustainable growth are available from the Sustainable Natural Rubber Initiative (SNR-I) and World Business Council for Sustainable Development (WBCSD).

Around 45 companies worldwide are part of the SNR-I. They include 31 manufacturers and exporters, and 14 rubber consumers and processors.

As of January this year, 11 companies had joined WBCSD.

“Big companies and processors have committed to sustainable growth. They buy rubber from providers that have a sustainable development plan, so domestic companies should follow this trend,” Hoa said.

Bridgestone, for example, has elevated standards in its sustainable procurement practices by launching a new policy for supplier and partners, she noted.

Bridgestone notes on its website that “Minimum requirements strengthen existing guidance for respect of human rights, environmental standards and product quality, while including additional requirements for land conservation and rights, point of origin traceability and resilience.”

Hoa said that companies like Olam and Sri Trang Group also include information about sustainable development on their websites.

In Việt Nam, the Việt Nam Rubber Group is the first rubber company to commit to sustainable development, according to Hoa.

The rubber association will continue to develop a trademark for Vietnamese rubber and implement sustainable development programmes, she said.

It is also working with organisations to improve members’ awareness about sustainable development, and will offer support to members to join sustainable development projects.

Việt Nam is one of the biggest rubber exporters in the world, with products exported to 128 nations and territories.

In May, the country exported 93,000 tonnes of rubber, worth US$133 million. For the first five months of this year, the total export yield was 424,000 tonnes, valued at $620 million, up by 17 per cent in volume.

China, India and Malaysia are the three biggest importers of Việt Nam’s rubber.

A report from the Việt Nam Rubber Association said that by the end of 2017, the country had 971,600ha of rubber trees, with a yield of over 1.08 million tonnes, accounting for 8.3 per cent of the total world yield. — VNS


Read more at http://vietnamnews.vn/economy/449926/rubber-industry-eyes-sustainability.html#IVBdJPcD0Oy1BM61.99

 

 

Global demand to continue driving earnings for rubber products

 

 

 

KUCHING: The resilience of global demand is expected to continue driving earnings for the rubber glove sector as it continues to be plagued with higher natural rubber prices.

While current raw material prices like natural rubber is expected to continue trading at higher levels for the remainder of 2018, analyst MIDF Amanah Investment Bank Bhd (MIDF Research) believes that the sector’s earnings will continued to be driven by resilient global demands for rubber gloves in 2H18.

According to the research arm, the Malaysian Rubber Glove Manufacturers Association (MARGMA) has project that the export for rubber gloves will increase by +10 per cent to RM18 billion from RM16.2 billion in 2017, which is in line with the estimate increase in global demand of 8 to 10 per cent per annum.

“In terms of number of pieces, MARGMA projected Malaysia will export 232 billion pieces in 2018 versus 228 billion pieces in 2017, and 287b pieces per annum by 2020,” said the research arm.

The earnings form the increased exports will also be supported by forecasts of a stable US dollar (US dollar) as the exports are USD-denominated.

However, MIDF Research guides that the current stable US dollar is more beneficial in the longer term than near term as it provides better visibility in terms of revenue and costs while also assisting in currency hedging for manufacturers and reduce potential foreign exchange losses.

And softening the effects of higher raw material prices further is the potential increase in average selling prices (ASPs).

Based on analysis by MIDF Research, it was suggested that the blended average selling prices (ASPs) for gloves have increased less than 23 per cent, meaning that there could potentially be further price increase in 2Q18.

“Therefore, we believe that the gloves producers could potentially record better earnings in the quarters to come due to adjustments in pricing and new capacity expected to come on board in 2H18,” said the research arm.

The raw material prices are expected to continue trading high between the ranges of RM4.50 to RM5 per kg for the remainder of 2018 due to the Tripartite Agreement between Malaysia, Thailand and Indonesia, which aims to ensure the price of natural rubber does not fall below RM4 per kg.

Besides that, the high price of natural rubber will also be supported to remain at current levels due slower growth in China’s automotive industry arising from its recent move to restore its passenger car purchase tax to 10 per cent from 7.5 per cent in 2017 and 5 per cent in 2016.

“That said, we also understand that despite ending the tax incentive policy for compact cars with an engine displacement of 1.6litres and below, starting in January 2018 the government of China has introduced purchase tax exemption for New Energy Vehicles (NEV) for the period of three years which could gradually alleviate the price of natural rubber from 2019 onwards,” added the research arm.

As for nitrile butadiene (NBR) price, the research arm opines that the price would be trending upwards as the demand for nitrile gloves increases worldwide.

Due to this, they estimate that the price of NBR could increase by a further 5 to 10 per cent from its current price to an average of USD1,000 to 1,100 per tonne for the rest of the year.

For 1QFY18, most rubber glove manufacturers found themselves within expectations but with subdued earnings due to a +23 per cent hike in natural gas tariff in January.

Looking forward, the sector will be facing some uncertainty in terms of labour as the new government’s election manifesto has highlighted their intent to increase minimum wages to RM1,500 while reducing foreign labour force by two million in stages.

According to the research arm’s estimates, a RM500 increase in minimum wages will reduce earnings of glove producers by RM1.5 to RM3 million, however this is expected to be passed off to their customers and will be reduced as companies start investing more on automation going forward to reduce their dependency on labour.

Currently, labour costs make up about 12 to 14 per cent of total gloves production costs and 70 to 80 per cent of the sector’s total workforce are foreign labourers.

Moreover, the sector’s near-term prospects are also expected to remain subdued as some rubber glove producers have constraints in terms of capacity from the delay in their capacity expansion from incomplete parts of their production lines.

Cambodia: Rubber exports grow slightly as prices fall

Exports of rubber rose moderately during the first three months of the year, as the market for the commodity continues to be hampered by unstable prices.

 

 During the first quarter of 2018, rubber exports grew by just 880 tonnes, reaching a total of 25,416 tonnes. During that same period, the price of the commodity decreased.

 

“Due to the current situation, the price of rubber in the international market is not stable, and farmers and rubber producers are taking a hit,” said Pol Sopha, director-general of the general directorate of rubber.

Lim Heng, vice-president of An Mady Group, expressed similar concerns.

“With the cost of production being very high in Cambodia, a low price is bad news for farmers and producers, who won’t be able to make a profit,” he said.

In Thailand and Vietnam, the price of the commodity is not affecting the industry as badly because the costs of production is much lower, Mr Heng said, explaining that in these countries the government grants tax cuts to farmers and producers of the commodity.

In 2017, Cambodia exported more than 190,000 tonnes of rubber latex, an increase of 30 percent year-on-year. Vietnam, China, Singapore and Malaysia were the biggest buyers.

Cambodia is the sixteenth largest rubber latex producer in the world.

 

Global rubber consumption has grown steadily

0
7
 

According to statistics released recently by the International Rubber Research Organization (IRSG), in recent years, the global rubber consumption has continued to grow steadily. In 2017, the global rubber consumption amounted to 28.377 million tons, an increase of 3.0% over the same period of the previous year.

Among them, China’s rubber consumption accounted for 30% of the total, ranking first in the global rubber consumption for three consecutive years. The consumption of rubber in emerging Asian countries such as India, Thailand, and Vietnam also showed steady growth, which together with China has driven the growth of global rubber consumption.

Statistics show that the consumption of rubber in China was 9.432 million tons, an increase of 2.9%. After the increase of 3.0% in 2016 from the previous year, it continued to grow steadily and exceeded its year-on-year performance for two consecutive years. According to reports, the production of cars and commercial vehicles in China’s domestic auto industry has been developing steadily, which has boosted the growth of rubber consumption.

The second largest US rubber consumption was 2.843 million tons, which was basically the same. In 2013, the rubber consumption in the United States fell to 2.6 million tons, but it started to rebound after 2014, reflecting the recovery of the US economy.

 

The third largest Indian rubber consumption was 1.679 million tons, an increase of 3.5%. In recent years, the size of the automobile market in India has dramatically expanded and new vehicle sales are expected to surpass Japan by 2020. India’s economic development has performed well in emerging countries, and rubber consumption has continued to increase accordingly.

The fourth-ranked Japanese rubber consumption was 1.556 million tons, a slight increase of 0.8%. In recent years, Japan’s rubber consumption has continued to decrease. However, in 2017, the market demand for vehicle tires, rubber hoses for automobiles, high-pressure rubber hoses for construction machinery and machine tools exceeded the year-over-year performance for the first time after several years. However, it is still difficult to predict whether Japan’s domestic rubber consumption will increase significantly.

The fifth-ranked rubber consumption in Thailand was 1.275 million tons, a year-on-year increase of 10.7%. As a global production base in Asia, Thailand is accelerating the development of vehicle manufacturers and parts manufacturers. In relation to this, Thailand’s rubber consumption is expected to continue to expand.

Accordingly, in the top five countries, the proportion of rubber consumption in global rubber consumption is about 60%.

In addition, among the top 15 countries in terms of rubber consumption, the highest growth rate was in Vietnam ranked 12th in 2016, with an increase of 20.5% in 2017. Reported that Vietnam, with its cheap labor force, has attracted Japanese and South Korean electronics equipment manufacturers to invest and set up factories. Vietnam is attracting attention as a new production base for ASEAN. The increase in rubber consumption in the future is also expected.

Among the Southeast Asian countries, Indonesia’s rubber consumption ranks sixth with 971,100 tons, which represents a year-on-year increase of 5.7%; Malaysia ranks eighth with 890,300 tons, a year-on-year increase of 6.8%, and its growth in rubber consumption is mainly driven by automobiles and motorcycles. Pulling the demand for vehicle manufacturing and automotive tires.

 

Natural Rubber production, consumption up in first two months of 2018

0
16
 

—Natural  production and consumption registered year-on-year growth in the first two months of 2018, according to the Association of Natural Producing Countries.

Production rose 4.3 percent to 2.2 million metric tons, while demand grew 7.5 percent year-on-year to 2.0 million tons for the period, the  said March 22.

During the first two weeks of February, the association said, NR prices across the key physical markets were hit by a fall in , strengthening of the and global equity market trends.

“Nevertheless, the NR prices showed (signs) of improvement and posted an upward trend in price toward the end of February 2018,” ANRPC said.   

 

The improvements, ANRPC said, reflect recovery in both crude  and global equity markets.

The association went on to predict a slowing of NR production throughout the coming months, citing the seasonal rubber tree ‘leaf-fall period’ in most of member countries as the driving factor.

  • Rubber News

 

Malaysia: Natural rubber production falls

0
87
 

: Natural  fell 2.0 per cent in January 2018 to 65,792 tonnes from 67,101 tonnes produced in the previous month, said the Department of Statistics on Wednesday.

Stocks rose 10.5 per cent to 254,525 tonnes at the end of January compared to 230,300 tonnes in the preceding month.

The smallholdings sector accounted for more than 92.9 per cent of the rubber produced in January, said the department in a statement today.

Exports in the month under review decreased 9.7 per cent to 46,928 tonnes and the five main destinations for Malaysia’s natural rubber were , Iran,  and .

  

Meanwhile, domestic consumption of natural rubber increased 1.6 per cent to 44,302 tonnes in January versus 43,617 tonnes consumed in the previous month.

In terms of rubber usage, the rubber glove industry accounted for 74.2 per cent followed by rubber threads (9.4 per cent), tyres and