21 August 2013 17:55 [Source: ICIS news]
One tyre producer has shut down two production lines, while another synthetic rubber producer has closed one of its lines. Overall, rubber and tyre production in the
"We've had one (SR) line shut down since June and will keep it offline through December," one source said.
"The demand is simply not coming back," said another source. "So we've had to cut back production."
Production managers meeting this month to plan fourth-quarter output have all said they plan to operate at reduced capacities through the end of the year. One producer said it was controlling tyre inventory by both reducing production at its
A lack of tyre demand worldwide is vexing the tyre, synthetic rubber and feedstock industries. Last month, Goodyear reported second-quarter earnings and said it had sold 1.6m fewer tyres in
The lack of demand for tyres has rippled back through the supply chain, driving down the price of both styrene-butadiene-rubber (SBR) and butadiene (BD).
SBR feedstock BD has fallen, as well. A year ago, the
Even if the production cuts do work and SBR and BD prices firm by a few cents in the next month or so, industry sources said the fundamental problem remains.
"Demand is simply not there," one source said. "And no one's really sure when it's going to come back."
Indeed, when prices for both commodities began to drop, sources had expected that the market, which is driven by consumer confidence and purchasing power, would firm in the second half of 2013. Now, most industry sources say that due to economic slowdowns in Asia and Europe and a still-struggling US economy, they do not see demand coming back before second quarter of 2014.
($1 = €0.75)
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