Will rubber prices rise again High cost pressure continues

On June 13, 2023, according to the latest news from foreign media, the life of European tire factories is likely to become difficult in the second half of 2023. At present, the UK has explicitly prohibited the import of rubber from Belarus, which means that the raw material import areas of European tire factories have been blocked again. Of course, the lack of a channel also means that tire companies may have to pay more for imported tire raw materials from other regions.

The news shows that the UK is blocking the import and export of goods worth approximately ￡ 60 million (approximately RMB 530 million) from Belarus, based on existing measures. This is also a series of new sanctions measures taken by the UK against Belarus - from July 2022, Belarusian gold, cement and timber have missed the English Market; In 2023, the UK added Belarusian rubber imports to its list.

According to the data, the total value of the above products that are not available in the English Market is about 60 million pounds. Overseas rubber industry media are also inquiring about the details covered by the rubber import ban. After all, this is related to the production cost of local tires in the UK. After all, the final reduction in oil prices has just given British tire factories breathing space, but banning the import of rubber is an uncertain factor in the production of British tire factories in the second half of the year - British tire factories are under great pressure.

In 2022, the doubling of pressure in European tire factories was a lesson from the past. The European Union has imposed sanctions on trade in rubber products produced or manufactured by Belarus. In March 2022, the European Union banned the direct or indirect purchase of rubber products originating in Belarus or Belarus; In addition, the transportation of rubber products originating in Belarus or exported from Belarus to any other country is prohibited.

This move has led to a sharp increase in the manufacturing industry of most tire factories. Due to rising manufacturing costs, many European tire factories have been judged to be inefficient and ultimately face the fate of permanent closure. Due to rising costs and the sluggish European tire market, some tire factories have been temporarily closed for a long time. In short, due to various factors leading to high cost pressure and low sales pressure, European tire factories have fallen into a relatively passive production state.

Although some leading foreign tire companies have stated that they have found new ways to import raw materials such as rubber in the second half of 2022, with these tire companies temporarily closing factories in Spain, the United Kingdom, and implementing monthly adjustments to production control inventory, it can be found that solving cost pressures is not as simple as imagined.

It is worth noting that after the second half of 2022, most of the factories temporarily closed and permanently closed in Europe will gather in the UK. Therefore, it is even more worrying that the UK's ban on importing Belarusian rubber may lead to an increase in rubber costs.

As early as the end of 2022, Goodyear Tire and Rubber Company announced that it would permanently close Cooper Tire&Rubber Company's motorcycle and racing tire factory in Melk Sam, because in addition to integrating European production capacity, it was also related to the low efficiency of the factory under cost pressure. As costs rise, tire giants still need to integrate to increase production capacity, let alone small and medium-sized tire companies that originally had ordinary risk resistance.

I don't know how many British tire factories have fallen into a headache under this ￡ 60 million list?

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