China Tire Sales to Advance 10%, Sumitomo Rubber Says -Shanghai Metals Market

Hot Keywords

  • Silicon
  • Inventory data
  • Nickel
  • Zinc
  • Futures movement
  • Copper scrap
  • Evening comments
  • Aluminium
  • Macroeconomics
  • Market commentary
  • Copper
  • Production data
  • MMi Iron Ore Port Index
  • Rare earth
  • निकल

China Tire Sales to Advance 10%, Sumitomo Rubber Says

Data Analysis 04:23:24PM Mar 15, 2010 Source:SMM

TOKYO, Mar. 15 -- Tire sales in China, the largest rubber consumer, will grow at three times the global rate as car ownership increases, Sumitomo Rubber Industries Ltd. said.

Sales will increase about 10 percent a year from almost 150 million tires in 2009, compared with a global gain of 3 percent, President Tetsuji Mino said in an interview. Still, the current level of global prices will not be sustained, he said. Sumitomo Rubber is the second-biggest tire maker in Japan after Bridgestone Corp.

China overtook the U.S. as the world's largest auto market last year as government stimulus policies boosted sales by more than 40 percent. Surging demand helped increase consumption of natural rubber used in tires, doubling the price in 2009.

"We are sure that China is the most promising market," Mino said in Tokyo on March 12. "Car ownership is spreading from wealthy people to ordinary consumers."

Motorists replaced about 100 million tires in China last year, or about 11 percent of global sales, while new vehicles needed as many as 50 million tires, Mino said. Car sales may slow if China boosts interest rates, while replacement tire demand will stay strong, regardless of policy, he said.

Global "prices have stayed around a historically high level," Mino said. "I personally don't expect the current level will be sustained given market fundamentals."

Prices Drop

Rubber for August delivery lost as much as 2.9 percent to 281.1 yen per kilogram ($3,103 a metric ton) on the Tokyo Commodity Exchange, the lowest level for the most active contract since Feb. 12, before settling at 281.5 yen.

"Tire makers slowed purchasing of the raw material after rubber prices gained," Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said by phone today.

The market also fell on concern China may raise interest rates, Shigemoto said. Inflation in China, the fastest-growing major economy, reached a 16-month high last month. Rising industrial output and higher than forecast loan growth has fueled speculation the government will pare stimulus measures.

Tire sales in Japan will probably decline gradually because of a shrinking population, while demand in the U.S. and Europe may stay little changed, Mino said. The U.S. is the second- largest rubber consumer and Japan the third.

Natural rubber output in the traditional low-production period will improve this year, boosting exports, the Association of Natural Rubber Producing Countries said in its February report. Member nations represent 94 percent of global output.

China Plant

While China is a strong candidate for the location of the company's next tire factory, the company will consider India, Brazil and Russia, he said. The producer has seven plants now, including one each in China, Indonesia and Thailand.

The company represents as much as 6 percent of the global tire market, the sixth-largest share, and aims to sell 86.3 million units this year under a plan to boost sales 6 percent annually through 2012, Mino said.

A declining and aging population in Japan means growth will come from international sales and production, he said. Overseas customers will represent 65 percent of group sales by 2015, up from 60 percent now, and offshore output will need to reach 50 percent as early as 2012, up from 40 percent, Mino said.

 

 

China Tire Sales to Advance 10%, Sumitomo Rubber Says

Data Analysis 04:23:24PM Mar 15, 2010 Source:SMM

TOKYO, Mar. 15 -- Tire sales in China, the largest rubber consumer, will grow at three times the global rate as car ownership increases, Sumitomo Rubber Industries Ltd. said.

Sales will increase about 10 percent a year from almost 150 million tires in 2009, compared with a global gain of 3 percent, President Tetsuji Mino said in an interview. Still, the current level of global prices will not be sustained, he said. Sumitomo Rubber is the second-biggest tire maker in Japan after Bridgestone Corp.

China overtook the U.S. as the world's largest auto market last year as government stimulus policies boosted sales by more than 40 percent. Surging demand helped increase consumption of natural rubber used in tires, doubling the price in 2009.

"We are sure that China is the most promising market," Mino said in Tokyo on March 12. "Car ownership is spreading from wealthy people to ordinary consumers."

Motorists replaced about 100 million tires in China last year, or about 11 percent of global sales, while new vehicles needed as many as 50 million tires, Mino said. Car sales may slow if China boosts interest rates, while replacement tire demand will stay strong, regardless of policy, he said.

Global "prices have stayed around a historically high level," Mino said. "I personally don't expect the current level will be sustained given market fundamentals."

Prices Drop

Rubber for August delivery lost as much as 2.9 percent to 281.1 yen per kilogram ($3,103 a metric ton) on the Tokyo Commodity Exchange, the lowest level for the most active contract since Feb. 12, before settling at 281.5 yen.

"Tire makers slowed purchasing of the raw material after rubber prices gained," Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said by phone today.

The market also fell on concern China may raise interest rates, Shigemoto said. Inflation in China, the fastest-growing major economy, reached a 16-month high last month. Rising industrial output and higher than forecast loan growth has fueled speculation the government will pare stimulus measures.

Tire sales in Japan will probably decline gradually because of a shrinking population, while demand in the U.S. and Europe may stay little changed, Mino said. The U.S. is the second- largest rubber consumer and Japan the third.

Natural rubber output in the traditional low-production period will improve this year, boosting exports, the Association of Natural Rubber Producing Countries said in its February report. Member nations represent 94 percent of global output.

China Plant

While China is a strong candidate for the location of the company's next tire factory, the company will consider India, Brazil and Russia, he said. The producer has seven plants now, including one each in China, Indonesia and Thailand.

The company represents as much as 6 percent of the global tire market, the sixth-largest share, and aims to sell 86.3 million units this year under a plan to boost sales 6 percent annually through 2012, Mino said.

A declining and aging population in Japan means growth will come from international sales and production, he said. Overseas customers will represent 65 percent of group sales by 2015, up from 60 percent now, and offshore output will need to reach 50 percent as early as 2012, up from 40 percent, Mino said.