@ China: Tire Export Slows Down, Natural Rubber Demand Is Weak (10/11/2017)

10 Nov 2017
45 times

’s  export volume in September drops and the accumulative export volume in the first nine months only increases slightly from last year, showing a stable but feeble export performance in 2017. ’s tire export is mainly relied on the mode of processing with imported feedstock. What kind of influence will the  import suffer from the slowing down tire export?

Tire Export Slows Down, NR Demand Is Weak China’s tire export volume in September drops and the accumulative export volume in the first nine months only increases slightly from last year, showing a stable but feeble tire export performance in 2017. China’s tire export is mainly relied on the mode of processing with imported feedstock. What kind of influence will the NR import suffer from the slowing down tire export? In September, the total export volume of all-steel tire and semi-steel tire is 420.10kt, down 16.42% MO-M and up 0.07% Y-O-Y. The accumulative tire export volume in the first nine months is 3,929.90kt, up 0.76% Y-O-Y. The export data in the first three quarters show that China’s tire export remains flat from last year. The export performance does not improve greatly. Meanwhile, the import volume of standard rubber in September is 144,70kt, up 7.02% M-O-M and down 2.22% Y-O-Y. The accumulative import volume of standard rubber is 1,488kt, up 17.57% Y-O-Y. Being different from the tire export, the import growth of standard rubber increases notably. China’s tire enterprises mainly produce tires with imported rubber feedstock and then export the tire products, as NR, the main rubber feedstock, is largely relied on import. Tire enterprises can also gain preferential tax policies. The chart below can show some references for the relations between NR import and tire export. Although NR import volume increases greatly, the resources mainly add the inventories at the Bonded Zone, which does not go to the downstream tire producers totally. That is influenced by the feeble tire export. Compared with the tire export performance in 2016, the tire export remains flat in the first three quarters of 2017. Foreign tire traders may stock up in end 2017. SCI predicts that the tire export may increase in Q4. Based on the above analysis, SCI believes that the flat tire export contributes insufficiently to the demand increase of NR and other rubber feedstock. Besides, although tire export may increase in end 2017, the growth may be limited. However, the analysis of NR import is mainly based on the tire export. A large proportion of imported NR goes into the market circulation. There is a lag between the NR import growth and the downstream demand growth. With no favorable bullish factors, the demand for NR will still be insufficient. The NR market may face oversupply in the future.

Source : https://globalrubbermarkets.com/

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