13 March 2013 16:55 [Source: ICIS news]
LONDON (ICIS)--Tyre firms in Europe could reduce output even further if demand does not improve, an Italian tyre producer said on Wednesday.
The producer said: "If the market situation does not change, I'll have to reduce production rates."
The tyre industry is the largest consumer of styrene butadiene rubber (SBR), and demand from the sector strongly influences the performance of the SBR market.
The producer's comments came after Japanese tyre maker Bridgestone announced last week that it would close one of its European plants in Bari, Italy in response to falling tyre sales. Bridgestone was the second tyre maker to announce closures this year, preceded by Goodyear in Belgium in January.
Despite the weak current demand, some good news emerged during the 2012 results season. German tyre major Continental seems to have weathered the crisis better than its competitors and reported a €1.9bn ($2.5bn) increase in its 2012 profits on the back of a 7.3% increase on sales to €32.7bn during the year.
Despite dire prospects in the European tyre market, Continental forecasts a 5% growth in sales in 2013.
"SBR demand is not expected to improve much during 2013, mainly driven by poor demand from the automotive, tyre and industrial rubber sectors," an SBR trader said.
It added that there has been hardly any interest in obtaining spot material, and even China and other parts of Asia seem to be slowing.
($1 = €0.77)
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