China's tire industry profits surge 43.7% in 2012

China’s tire industry realized profits of 27.5 billion yuan in 2012, posting a year-on-year rise of 43.7%, said the National Development and Reform Commission (NDRC) in a statement published on its website.

The improving profitability was mainly attributable to falling costs in raw materials.

On one hand, prices of natural rubber had been on a downward path due to ample supply and comparatively weak demand; on the other hand, falling prices of coal and crude oil have also dragged down the prices of synthetic rubber, according to the NDRC.

For instance, the average price of standard rubber product -- SCR10 -- fell to 25,053 yuan/metric ton (tonne) in 2012, down from 33,835 yuan/tonne in 2011, based on the NDRC data.

Although tire prices had also dropped following the plunge in raw materials, the industry still managed to see a sharp rise in its gross profit margin last year, posting a return on assets (ROA) rate of 7.3 percent, up 2 percentage points from that in 2011, said the report.

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