Although the economy of the rubber industry will continue to operate steadily in 2013, there is still an oversupply situation. Prices are further pushed to the margins of profits. Pressure forces some companies to shut down. Industry insiders say that the narrowing of profit margins will promote industry consolidation. arrival.
As the price of rubber products (including natural rubber and synthetic rubber) has continued to slump, manufacturers have even said that they “below the cost lineâ€. This phenomenon has not only undermined the enthusiasm of rubber farmers for planting rubber trees, but has also made it difficult for domestic agricultural enterprises to sell, and at the same time it has made profits. Severe shrinkage. A trader stated that the suspension of production in 2013 was a “routine†for the rubber industry.
The fundamental reason for the continued fall in rubber prices is the oversupply. An analyst from a brokerage firm in Shanghai said that the domestic capacity expansion is too fast and the demand growth rate cannot catch up with capacity expansion. As a result, demand cannot digest supply increments, resulting in excessive capacity expansion and excessive pressure on the supply side; The weakening of the economy has also led to a reduction in the demand side capacity and further imbalances in supply and demand.
“Although the number of production-discontinuation devices has gradually increased, due to too many new installations in the past few years, the overall market capacity still shows a significant upward trend. Therefore, domestic production capacity will continue to expand in the next few years,†the source said.
In addition, the low price of natural rubber also makes profit recovery of downstream tire companies. But despite this, the signs of a drop in tire prices are still evident. According to a number of large tire company executives, although the cost has fallen, the market price of tires has also fallen, and the profit margin has further narrowed. “Now it is very difficult to make profits.†In 2013, the China Rubber Industry Association organized the research and development of the “Tire Industry Access Conditionsâ€, and its rules will be finalized after the consultation stage. It is reported that the access conditions will be determined by the specific details of the tire product quality, energy and resource consumption of tire manufacturers, as well as the emission limits for water pollution, air pollution, etc., and regulate the overall production capacity of the tire industry.
An analyst at a brokerage in Shanghai said that “tire industry access conditions†will be an opportunity for the rubber-tire production chain. He pointed out that if the implementation is strong, SMEs in the tire industry will fall into a passive situation, market resources will be concentrated in large-scale enterprises, the industry concentration will be significantly improved; at the same time, the quality of tires is also clearly defined therein, and the improvement of tire quality means The requirements for the quality of raw rubber have increased. From the perspective of the quality of rubber in the current market, only large companies can produce rubber that meets the standards. Therefore, this provision also has a certain role in promoting the rubber industry.
A brokerage analyst said that it is expected that the growth rate of domestic tire production will be 3%-5% in the next few years, and micro-growth will become a normal state. He also said that the domestic multi-regional haze weather will curb the domestic vehicle consumption demand, coupled with the major cities in the 2014 purchase limit policy, the future deceleration of end-of-car market growth will drag down tire demand.
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