AFPM '13: For rubber feedstock suppliers, the focus is on tyres

23 March 2013 18:00  [Source: ICIS news]

HOUSTON (ICIS)--Whether you are producing butadiene (BD) in Texas, buying acrylonitrile-butadiene-styrene (ABS) in Europe, or trading acrylonitrile (ACN) is Asia, tyres are the primary concern, sources said this week heading into the American Fuel & Petrochemical Manufacturers' (AFPM) International Petrochemical Conference (IPC).

Market participants have been watching sales of new cars and replacement tyres in an effort to gauge demand. The short answer is that sales have not been good.

Outside of the US, the auto markets are in decline. Europe recently reported that February auto sales were down 10% compared with 2012.

Four of Europe’s five biggest auto markets saw declining sales in February, with Italy, Germany and Spain all reporting double-digit decreases. Ford and GM, the world’s two biggest car makers, both reported European car sales down by 20% in February.

In Asia, the outlook is similar. The Chinese economy is expected to grow by only 7.5% this year, down from the double-digit gains it has posted over much of the past decade.

In February, India, one of the fastest-growing Asian auto markets, saw sales drop by 26%. For the fiscal year ending 31 March, India is expected to report the first annual decline in a decade.

Replacement tyre sales are not much better. With the economy in Europe struggling, the US limping along at less than 2% annual growth, and the Asian economies cooling, consumers are putting off replacing worn tyres.

All of this has led to record-high inventories in Asia. With tyre demand down and factories operating at reduced capacity, some Asian feedstock producers are starting to increase shipments to the US, putting pressure on prices and squeezing margins for US producers.

Across the globe, it is a tough market. And the question everyone is asking this week is, when is it going to turn around?

The IPC begins on Sunday and lasts through Tuesday in San Antonio, Texas.

By: Mark Yost
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index