Tire makers searching for substitutes for rubber on supply concern

Several tire makers have already started searching for substitutes for rubber on supply concerns after ASEAN countries cut rubber exports in a bid to stabilize prices of the commodity.

Global rubber prices have fallen by 43 percent in the past twelve months, dragged down by waning demand from Europe andChina– the world’s largest rubber consumer.

In order to cap the downward trend of rubber prices, the world’s top rubber producers, includingThailand,Malaysia, andIndonesia, had reduced rubber exports in the hope of pushing up international rubber prices. The three countries account for about 70 percent of the global rubber output.

Meanwhile, benefited from low rubber prices, the world’s top tire makers – Bridgestone and Michelin – both posted record-setting global revenue growth in the first half of this year.

But the raw material-backed profitability could be short-lived especially under the current scenario of decreasing tire demand around the world. Any fluctuation in raw material prices could decide the destiny of a downstream industry, such as tire manufacturing.

Therefore, in order to secure their long-term profitability, several tire makers have begun to reduce the amount of rubber in tire manufacturing. An industry source disclosed that Bridgestone has invested 100 million U.S. dollars in the R&D for rubber substitutes.

More tire makers are expected to join in the efforts in finding substitutes for rubber in the coming years, industry observers noted.

(Contributed by Olivia, olivia@tireworld.com.cn)