Major Taiwanese tyre makers to hike prices as rubber costs increase

tires-2Major tyre makers in Taiwan have announced plans to increase prices by 8% to 12% next year as synthetic rubber and natural rubber prices also go up.

In a Taiwan Stock Exchange filing, tyre manufacturer Federal Corporation said it would raise prices by between 9% and 12% next year. The announcement came just days after Nankang Rubber Tire Corp. announced price hikes by the same percentage. Meanwhile, Hwa Fong Rubber Industry Co. said it would increase prices by 8% to 10%.

Global rubber prices soared 100% to US$2,200 per tonne this month from US$1,100 a year ago, according to Nankang spokeswoman Kuo Mei-hang.That also represented an increase of 47% from US$1,500 a month ago.

Kuo said that synthetic rubber and natural rubber account for more than 50% of Nankang’s raw material costs.

Kenda Rubber Industrial Co., the nation’s second-largest tyre manufacturer, is also planning to increase prices by between 3% and 5% next year, a company official said.

The official, who declined to be named, said its global competitors had raised prices by nearly 3% this month, including Michelin Group, Goodyear Tire & Rubber Co. and China’s biggest tyre maker, Zhongce Rubber Group.

The Kenda official said the company will not increase prices significantly in the near term as they hope to sustain their global pricing competitiveness, adding that the company has better bargaining power than its local peers.

Commenting on the global trend in rubber prices, the official said that prices might return to normal levels sooner than expected. He said the upward trend in raw material prices was mainly due to market manipulation and not in real demand and supply problems in the global rubber market.

Kenda’s main rival in the domestic market — Cheng Shin Rubber Industry Co. — is also mulling raising prices in the first quarter of next year. Cheng Shin spokesman Richard Lo did not elaborate further, but said they will take their customers’ feedback into consideration.