A RECENT report by Bloomberg indicated that natural rubber demand in China will be focusing on producing consumer tyres and shifts away from the heavy equipment and truck tyre segments.
Shen Jinrong,Chair of the Hangzhou Zhongce Rubber Co. said in the report that demand for truck tyres will decline as China shuns from heavy industries to “a more consumption-driven growth model.”
Meanwhile, the China Rubber Industry Association (CRIA) estimates that 3.25 million tonnes of NR will be used in the country’s tyre sector this year, and SBR consumption will climb 7.8%.
What has prompted the shift is the slow domestic growth and excessive rubber stockpiles, compounded by the impact of the Euro economic crisis that have brought down price levels of NR prices in the domestic markets. Previously, tyre makers in China allot 70% of their domestic production to heavy equipment and truck tyres.
Nonetheless, whilst tyre production in China is porjected to increase by 4% this year, the shift will not affect China’s rubber consumption, which, analysts said would remain flat.