Another year of slowdown for China’s rubber industry

Beijing, China - The number of companies in China’s sizeable rubber sector, including tire makers, reduced by 79 in 2018 to total 3,565 in 2018, following a drop of 324 companies in 2017.

The sector’s main business revenue remained flat in 2018 at €92 billion (698 billion yuan). Export delivery value rose by 4.4% from 2017 to €20 billion; total profit increased by 2.1% to €4 billion, according to China’s National Bureau of Statistics.

“It seems that some companies’ performance is picking up but it’s only because there is market space to fill upon the shutdowns,” said China Rubber Industry Association (CRIA) secretary general Xu Wenying at the China Rubber Conference held in Guangzhou in March.

CRIA also surveyed the 2017 and 2018 growth rates for 388 key companies in the sector.

The findings revealed sharp drops in production, sales and exports, reported Xu, who went on to comment: “The jump in 2018 profit growth-rate only means we had a really bad year in 2017.”

This year’s CRIA annual meeting took place against a background of trade tensions between the US and China as well as a marked reverse in the performance of the Chinese automotive market.

According to figures from the China Association of Automobile Manufacturers (CAAM), vehicle sales in the country fell by about 3% year-on-year to reach a total of around 28 million in 2018.

For 2019, the automakers association has predicted that the decline – the first annual fall in sales since 1990 – will level out with sales remaining flat next year.

Sales of new light-vehicles in China should by unchanged at 23.6 million, while deliveries of new commercial vehicles including buses and trucks will edge up 1% to 4.4 million, it forecasts.

As well as market factors, including the US trade dispute, analysts also point to the impact of China’s rapid and ongoing transformation towards automation and electrification on vehicle demand.