Report: NR Demand Weakening in China, Inventories Rise - Tire Review Magazine

Report: NR Demand Weakening in China, Inventories Rise

Bloomberg reports that significantly reduced demand by domestic tiremakers has resulted in expanded natural rubber stockpiles at the country’s main rubber and finished tire port.

The Qingdao International Rubber Exchange Market told Bloomberg that, “Demand from downstream tiremakers seems to be weak at the current stage, so destocking has slowed down,” said exchange chairman Li Xiangou.

Li, who foresaw the downturn, according to Bloomberg, said NR futures have fallen 50% from record prices set in February 2011.

Most of the demand issue has risen from a downturn in China’s auto market, which is off 1.3% through the first four months of 2012, and the European debt crisis, which has caused worry across many sectors in China.

China’s tire and auto markets have “yet to come to terms with a scenario where Chinese demand is diminishing faster than anticipated,” according to Wang Chen, head of research at Hangzhou Dunhe Investment Co. “Weak auto sales in China, especially falling sales of trucks, coincide with a lackluster market in the U.S. and Europe, and may lead to a glut of the commodity that hasn’t yet been reflected in prices.”

According to Bloomberg, NR inventories at the Qingdao port “have stayed above 200,000 tons since November when they exceeded that level for the first time.” There was some destocking in March and early April, but it slowed down since the beginning of this month, Li said.

There are reports that NR inventories in Japan are also rising. Inventories of NR held at Japanese warehouses “gained 2.9% to 15,198 tons as of May 10, according to the Rubber Trade Association of Japan.”

Perhaps 50% of the Qingdao NR inventories may be tied up in funding deals, said Li. “Some companies are using rubber imports as collateral to bypass loan restrictions to get access to bank credit, which has led to persistently high port inventories,” he said. “Such practices exaggerate demand because these importers haul in shipments from Southeast Asia for which they don’t have ready buyers.”

You May Also Like

Maxxis-sponsored athletes make podium, overall top 10 at Mint 400

Maxxis athletes Michael McFayden, Ethan Ebert and Trey Gibbs had podium finishes at the Mint 400 on Maxxis RAZR XT tires.

2024-mint400-maxxis

Maxxis sponsored athletes Michael McFayden and Ethan Ebert finished the Mint 400 on the podium and Trey Gibbs turned in a fourth place performance in his class and seventh overall. The Minto 400 is coined “The Great American Off-Road Race.”

McFayden was second in UTV Pro NA, finishing the four-lap race in nine hours, 24 minutes and 38 seconds. He drove his Honda Talon on Maxxis RAZR XT tires. Ebert finished with a third-place spot on the 2WD podium and 13th overall, with a final time of seven hours, 41 minutes and 46 seconds. His Honda Ridgeline was outfitted with the same RAZR MT tires. Also riding RAZR MTs, Gibbs cracked the overall top 10 in seventh place and was fourth in Unlimited Spec after finishing in seven hours, 17 minutes and 46 seconds.

Sun Auto Tire reveals winner of Ford Bronco Sport giveaway

Lowell Anderson entered the giveaway at his local Sun Auto Tire & Service store while receiving a routine oil change.

Sun-Auto-Bronco-giveaway
Nokian Tyres holds bracket challenge on worst roads in North America

In 2023, the tiremaker’s audience voted Quebec as the province or state with the worst road conditions on the continent.

Pothole-Protection-from-Nokian-Tyres
Gallery: 2024 Big O Tires conference and convention

Highlights from this year’s Big O Tires conference and convention, featuring a general session, trade show and breakout sessions.

Gary-Skidmore
Bridgestone’s Firestone Liberia rubber farm receives ISCC Plus recognition

According to Bridgestone, its Liberia facility earned the ISCC Plus certification for its efforts in reducing environmental impacts.

Firestone_Liberia

Other Posts

Ascenso Tires adds new OEM sales manager

Ascenso said Douglas Duesing has more than ten years of experience working in agriculture, construction and mining OEMs.

Ascenso-Douglas-Duesing-1400
Nexen Tire Motorsports drivers earn top placements at King of the Hammers

Nexen Tire Motorsports partnered with drivers across a variety of racing series both on- and off-road, including King of the Hammers.

Nexen-KOH
BKT to showcase its EarthMax tire range at AGG1 Academy & Expo

At booth 353, BKT said it is going to display its flagships for the OTR world, namely three all-steel radial tires from the EarthMax range.

BKT-AGG1-expo-1400
Yokohama to sponsor the Bass Pro Shops Bassmaster Classic Tailgate

The event, part of the Bassmaster Classic Expo, is March 21-24 in downtown Tulsa, Oklahoma and Grand Lake.

Bass-stock-photo