ERJ: Rubber & tire industry in numbers

Review of the key figures and data to emerge this week from leading players in the tire & industry: 

Projects & investments

Bridgestone EMEA is to invest “up to €207m” at its 1,320-employee Burgos passenger car tire plant in Spain between now and 2030. The project is to increase output of high-rim-diameter (HRD) tires 75% to over 7m units/year and raise productivity there by around 20%.

Chinese tire maker Sailun Group is planning to invest €230m in a new tire plant in Demak City, Indonesia. The facility will have annual capacity of 3m PCRs, 600k TBRs and 37kt off-highway tires. Construction is expected to take 21 months, said a 12 Mar statement.

Guizhou Tyre plans to build a new passenger car tire plant in Vietnam. In a 5 March filing, the tire maker said it is to invest €207m in the new factory at the Long Jiang Industrial Park, in Vietnam's Tien Giang province. The unit will have capacity to produce 6m units/year.

Zhejiang, China-based materials supplier Zhongzhe Group is set to establish a €380m synthetic rubber plant in eastern Chinese port of Ningbo. The 200ktpa facility will produce styrene solution butadiene rubber and low-cis butadiene rubber, for use in tires for new-energy vehicles and is scheduled to be operational by the end of 2025.

Financials

Pirelli reported 2.5% year-on-year growth in annual earnings (adjusted EBIT) to €1.0bn on sales up 0.5% year-on-year to €6.6m, including a 6.3% negative foreign exchange effect. Earning were helped by an 8.6% – €486 million – positive impact of price/mix improvement. The ‘high value’ larger-rim-sized segment saw 5% growth in volumes: 4% replacement market and 6% OE.

French automotive and HGV equipment and systems maker Akwel reported a 7.9% year-on-year increase in sales – 9.6% at constant currencies – to €1.0 bn. By market region, sales were: France, €306m (+13.9%); Europe (excl France) and Africa, €302m (+12.7%); N. America, €296m (-0.9%); Asia and the Middle East (including Turkey), €157m (+6.9%), S. America, €4.7m (-15.8%). Sales development by product-line were: 'air intake' (+26.3%); 'washer systems' (+17.3%); 'cooling' (+9.6%); structural parts for EVs €21.5m (+77.9%).

Canadian compounder AirBoss of America Corp. reported a 40% year-on-year decline in adjusted earnings (EBITDA) to $26.8m on net sales down nearly 11% to $426m. Group loss widened to $41.7m from $32m the year before. AirBoss linked the performance to the impact of economic headwinds, “fuelled by labour stoppages in the auto sector and continued delays in government sourcing”.

Tire markets

HSBC Global Research has forecast raw materials costs to switch from being a tailwind to become a significant headwind for tire makers later this year: “Current spot prices imply that raw mats will turn into a headwind again from second half 2024.” (See charts above)

Tire manufacturers’ share-price trends

Materials prices

Natural rubber

The Association of Natural Rubber Producing Countries saw a “notable improvement” in natural rubber (NR) market sentiment over the first two months of 2024. It reported average February rubber prices for SMR-20 (Kuala Lumpur); STR-20 (Bangkok); RSS-3 (Bangkok) and RSS-4 (Kottayam) up by 1.9%; 6.2%; 12.8% and 3.6% respectively compared to the month before.

Thailand-based NR major Sri Trang set a bullish sales volume target of 1.5 million tonnes for the year, 15% up compared to 2023. Management linked the bullish projection to customer inventory trends and concerns about impact of the El Nino weather phenomenon on rubber supply.

JPX: Selected NR futures price trends on major trading exchanges

 (See also JPX pricing trends chart above)

Last week’s figures