“Based on current spot prices for the full year of 2018, we expect our raw material costs will be up approximately $190 million compared to 2017,” added Goodyear’s statement.
The US company, however, cautioned that this estimate could change significantly based on fluctuations in the cost of natural rubber and synthetic rubber and other key raw materials.
“We are continuing to focus on price and product mix, to substitute lower-cost materials where possible, to work to identify additional substitution opportunities, to reduce the amount of material required in each tire, and to pursue alternative raw materials,” stated Goodyear.
Also in the US, Cooper Tire noted a ‘slight’ increase in its raw materials costs compared to the second quarter of 2017.
The company’s raw material index increased 4.6% sequentially from 156.6 in the first quarter of 2018 to 163.8 in the second quarter.
Cooper Tire’s second-quarter figures note a $2-million rise in raw materials costs within its Americas segment but a $6-million decrease across its International segment.
But the issue is not going away, president & CEO Brad Hughes commenting: “Due to continuing industry challenges and, in particular, rising raw material costs, we are revising our expectations for the balance of the year.
“Cooper now anticipates unit volume to be flat in 2018 compared to 2017, with a modest sequential improvement in operating profit margin in the second half of this year.”
Groupe Michelin’s interim results include a €67-million negative effect on higher raw materials costs over the first six months of this year. This included increases of between 1% and 2% in average process for butadiene and natural rubber.
The French group, however, noted that price-changes take around six months to feed through to its income statement for natural rubber and around three months for butadiene.
There were more positive soundings from other players.
At the half-year stage, Bridge-stone Corp. reported year-on-year declines of 21% and 27% respectively in the price of TSR20 and RSS3 – two of its most widely used natural rubber grades.