German rubber industry reports recovery amid ‘tense supply situation’ 

Frankfurt, Germany – The German rubber industry continued to rebound in the first half of 2021, but concerns remain regarding the supply of materials and a slow recovery particularly within the automotive sector.

Sales were up 16.8% year-on-year at €5.2 billion in the first six months of the year, but still nearly 6% down compared to 2019, said the German rubber association wdk on 3 Sept.

Tire sales stood at €2 billion, up 18.9% year-over-year, while general rubber goods (GRG) posted a 15.6% increase to €3.2 billion, according to wdk. 

Production of tires rose 25% to 300 kilotonnes during the first half while GRG manufacturing posted a 23.5% rise to 420 kilotonnes during the period.

Utilisation rates within the tire sector reached 91%, up 49% compared to last year. The general rubber goods segment posted a utilisation rate of 89%, up 18.7% from first half of 2020.

The period saw “individual segments” such as non-automotive, construction and consumer industries returning to the 2019 levels, according to wdk.

However, the assocaition warned that “the most important customer for industrial rubber products”, i.e. the automotive sector, "is not picking up speed with vehicle production, both nationally and internationally."
 
"In vehicle manufacturing, the shortage of raw materials – especially semiconductors – led and continues to lead to significant production restrictions," said Michael Berthel, chief economist at the wdk. 

Companies, he noted, have so far been able to "manage" the bottlenecks “at great expense.”

“[However,] The exorbitant price increases for the most important raw materials and the 'literally exploded' logistics costs have weighed heavily on earnings,” he added.
 
Commenting on the issue, wdk CEO Boris Engelhardt called for a “cooperative and solidarity-based behaviour in the automotive value chain.” 

"Since 2018, our companies have been initiating the structural change in the automotive industry with high investments,” he said. 

The corona pandemic, he went on to say, has not stopped this process, and last year's losses have "eroded the already slim substance of suppliers."

“What is needed now is partnership in the value chain. The suppliers have nothing left to give!" Engelhardt said.
 
The wdk official also called on the next German government to support key industrial production, including rubber processing, with 'political security, moderate regulation and internationally fair competitive conditions.' 
 
According to wdk, the business climate in the German rubber industry has recently weakened and the expectations of companies in the sector “have clouded over significantly.” 

The association expects a “moderate business trend” for the second half of 2021, largely due to a stronger base effect from the second half of 2020 and ‘tense supply chain situation’ caused by high prices of raw materials and logistics services.

For the full year, wdk expects sales to grow by 9% compared with 2020 to €10.2 billion.