China tire industry facing severe challenges

In a September 15 staff report, the European Rubber Journal relays a report from the China Rubber Industry Asssociation which states that the China rubber industry faces a severe test in the latter half of 2011. Reduced demand for automobiles and rising raw materials prices, along with rising interest rates, “scandals facing Tianjin Kumho Tire” and the high cost of new technologies contribute to the pressures confronting the tire manufacturers. Tire inventories have risen by 32 percent relative to this period last year as production growth has declined sharply. Some tire manufacturers are operating at capacities as low as 50%.