Tire Enterprises Jointly Asked for Help from the State Council Due to Cost Explosion

On the eve of New Year's Eve of a rabbit, the seven tire giants in the Chinese tire industry gathered at the China Rubber Industry Association in Beijing and were trapped in a tire business that was “more and more loses money”. In Beijing, a tire industry coalition was jointly called for help. book".

“Saving the tire industry, the report on the regulation of natural rubber prices has already reached the State Council and is now approved by the relevant departments.” The relevant person in charge of the China Petroleum and Chemical Association stated that, according to report, the report is from the Chinese petrochemical industry. The purpose of the relevant members of the association was to seek to “cool down” the price of natural rubber that is currently in hot weather to save the tire industry that is on the verge of life and death.

Crazy natural rubber

On February 9, 2011, part of the tire production line of Guizhou Tire Co., Ltd. was not started. At the same time, many domestic tire companies also chose to continue the postponement of the holiday after the Spring Festival holiday.

This is one of the measures taken by the tire industry for self-rescue. It uses the Spring Festival to extend the time limit for the holiday stoppage of tire companies to reduce the use of natural rubber and reduce the cost of raw materials. "Now that the more work starts, the more losses, the higher prices of natural rubber make it impossible for companies to stand up. The price trend has completely separated from the fundamentals. It was felt that the prices of natural rubber 30,000 yuan/ton could not be reached. It took only two months. It is now close to 43,000 yuan," said Galaxy Futures Rubber Researcher. Crazy car sales in 2010 also contributed to the mad tide of natural rubber prices. According to statistics, General Motors Corporation of the United States and Chrysler Corporation achieved sales growth of more than 20% in 2010.

"This Spring Festival, according to the agreement of the first seven tire companies, may first leave for two weeks, and then depending on the price of natural rubber to decide when to start work," said Mr. Shen of Hangzhou Zhongce Rubber Co., Ltd.'s office.

The price has doubled in less than a year, which is the current crazy price of natural rubber. On February 9, 2011, Hujiao rushed to a record high of 4,35500 yuan. In June 2010, Hujiao's price was only 20,000 yuan. On February 10, the central bank announced an increase in interest rates, the Shanghai and Shenzhen indices fell, but Hujiao still hit a record high prices, the Hujiao main contract 1105 closed higher than the previous day's settlement price rose 825 points, Hujiao total turnover of about 300,000 hands .

Affected by the surge in natural rubber futures, Hainan Rubber recently rose against the market and went straight to “high price”. On February 10th, due to the cumulative increase of more than 20% in the past three trading days, Hainan Rubber was suspended for one hour.

At the same time, the domestic tire company Aeolus shares and Tire Tire A also released a performance reduction announcement affected by skyrocketing natural rubber prices. Fengshen's shares are expected to have a 50% year-on-year reduction in net profit for 2010, while Tire tires are expected to decline by 50% year-on-year. 70%.

“In 2010, there was a sharp drop in natural rubber production, coupled with increased demand, rubber prices rose too fast, rubber prices rose, domestic natural rubber and synthetic rubber to follow, tire companies simply have no time to adjust prices, so even if the price increases repeatedly, profits are also A sharp decline," said Shao Ka, deputy manager of Xi'an Business Department of Beijing Mid-term Futures Co., Ltd.

The increase in the price of natural rubber undoubtedly increases the production costs of tire companies. “The cost has increased by more than 60%. Although our company has repeatedly raised tire prices, it still cannot offset the cost increase caused by raw material price increases.” The head of the tire sales department felt very helpless.

According to statistics from the China Rubber Industry Association, from January to November 2010, the tire industry profits fell by 22% year-on-year, with a loss of 26%.

Tire companies join hands to save themselves

Just after the Spring Festival, there was news that the tire companies had headaches in the production of natural rubber. The Natural Rubber Producing Countries Association (ANRPC) stated in its monthly report that the production of natural rubber in February 2011 would be affected by the slight extension of the tapping season by farmers, and the loss of natural rubber in the estuary of Yunnan, China's Inner Mongolia, was estimated at 153 million yuan.

In terms of consumption, the domestic auto market in 2011 is still “a good starter”. According to the latest data, January sales increased by 15% month-on-month. In the international market, US auto sales totaled 820,000 vehicles in January 2011, an increase of 17% over the same period in 2010.

Domestic petrochemical companies, especially Sinopec and PetroChina, are currently in extremely difficult times for tire companies and naturally hope to stabilize the market price of synthetic rubber. “Synthetic rubber industry is related to the tire industry upstream and downstream, with lip and teeth interdependence, one loss and one loss. Synthetic rubber prices should not follow suit with rising natural rubber prices.” The China Rubber Industry Association and seven tire companies collectively issued such a Joint request.

In addition to the temporary suspension of production, according to the reporter’s understanding, the joint statement issued by tire companies also hopes that the state can improve the natural rubber national reserve regulation mechanism and cancel the import tariff of natural rubber. When the price of natural rubber has reached the highest level in history, the import tariff of natural rubber will be cancelled. This will not only not affect the development of the domestic natural rubber industry, but will also help the tire industry reduce costs.

“Initially, the introduction of high tariffs on natural rubber imports was intended to protect the interests of domestic rubber farmers, but if domestic self-sufficiency is already severely inadequate, high tariffs will lose their significance,” said Yue Chunchen, general manager of Shanghai Shuangqin Group. In 2010, the total amount of natural rubber imported by China reached 2.37 million tons, but the total amount of natural rubber produced in China will not exceed 700,000 tons. The self-supply rate of natural rubber in China is declining year by year, and it may fall to 20% in 2010. Under this circumstance, China still adopts the previously formulated natural rubber import registration system. The import tariff of natural rubber is to lower the tariff from 20% ad valorem tax and 2600/ton specific tax.

“The amount of natural rubber in the national reserves is too small. Even if throwing storage is not enough to have an impact on the natural rubber market, we can only say that the tire companies’ plight will be slightly relieved. If the price of natural rubber is still high, the domestic natural rubber The price is very difficult to go," said Hong Zhu Securities analyst Tian Zhu, he also believes that the current implementation of natural rubber tariffs, even if all canceled, according to the current tariff of 2600 yuan per ton compared to 40,000 yuan per ton of days In terms of rubber prices, it is impossible for tire companies to turn a profit.

"Only until April 2011, when the new rubber season opens, the price of natural rubber will probably fall back," said Jing told reporters. Before that, natural rubber will continue to be a bull market. Domestic tire companies can only The winter is coming to wait for a new spring.

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