IN China, rubber prices went unstable down from US$4,125 per tonne in mid-February up to US$6,823 per tonne. This has caused net profits to dip by as much as 23.54%, according to the latest release from listed tyre companies including Aeolus, S Jia Tong and Qingdao Double Star.
Last year the performance of tyre companies was better, mainly because raw material prices were lower than the finished tyre prices, according to Topix Futures analyst. Furthermore, downstream automotive tyre production and sales were slightly higher in 2011.
Industry observers speculate that car volume growth will decline by 26% in 2012. The analyst group urges local tyre makers to be aware of the market risk and ensure stability through careful purchasing of raw materials; quality after-sales support; and continuous R&D investments for high-end tyres. (PRA)
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