REALTOP INTERNATIONAL CHEMICAL LIMITED

March 28, 2013
Bloomberg News reports that natural rubber demand in China has shifted away from the
heavy equipment and truck tire segments back over to consumer tires. Even with this shift, however, China’s net rubber consumption will remain flat for 2013, good news for tire pricing worldwide.

According to Hangzhou Zhongce Rubber Co. chairman Shen Jinrong, Bloomberg reported, demand for truck tires will fall as Chiuna moves from heavy industries to “a more consumption-driven growth model.”

The China Rubber Industry Association predicts that China’s tire industry will use 3.25 million metric tons of NR in 2013, the report said, but its SBR consumption will climb 7.8% this year.

Slow domestic growth, high NR stockpiles and the economic turmoil in Europe have pushed NR prices down in markets in China (off 14% this year) and Tokyo (down 6.6% this year). In previous years, Chinese tiremakers devoted some 70% of their domestic production to heavy truck tires, but that percentage is seen as shrinking.

China’s tire output is pegged to increase by 4% in 2013, but the shift to consumer tires means that will not translate into a 4% increase in NR consumption, analysts said.