Rubber & tire industry in numbers

PROJECTS

Linglong Tire Co. has started construction work on its seventh tire manufacturing plant in China. To be completed within a year, the ‘Anhui Linglong Tire Co.’ project in Lu'an City  will deliver a total annual production capacity of 14m tires – 12m light vehicle tires and 2m TBRs – once fully operational. Linglong previously put the cost of the project at Yuan5.1bn (€700m). The new factory is part of the group’s ambitious ‘7+5’ business strategy, which aims to establish a network of seven plants in China and five globally by 2030. Linglong currently operates five plants in China – at Zhaoyuan, Dezhou, Liuzhou, Jingmen and Changchun – and has also announced plans to establish a facility in Tongchuan.

Shanghai-based Red Avenue New Materials Group plans to build a rubber chemicals production unit in Thailand. The project, it stated, will be delivered by a 51:49 JV between group subsidiary Hongkong Tongcheng and its affiliate company Gold Dynasty Ltd. Total investment of the project is Yuan500m (€64m). Located in Rayong, the Thai unit will have a production capacity to produce 30ktpa of chemicals, and is slated for completion by the end of 2027.

Seoul – Momentive Performance Materials group and silicon products manufacturer Jiangxi Hungpai Material are to establish a JV focused on the manufacture and sale of silanes in Asia. The partnership combines Momentive’s materials expertise with Hungpai’s manufacturing capabilities for silane products, including organofunctional silanes.

M&A & RESTRUCTURING

Continental AG’s board has approved the planned spin-off of group sector ‘automotive’ and recommended that the AGM meeting in June to approve the step. Subject to approval, the future independent company is to have cash funds of €1.5bn by the time of the spin-off. Furthermore, the business is also to be strengthened by a revolving credit facility of €2.5bn.

MARKETS

The US Tire Manufacturers Association (USTMA) has projected total US tire shipments to reach 340.4m units in 2025, up from a record 337.3m in 2024, and 332.7m in 2019. Compared with 2024, OE shipments for passenger, light truck and truck tires are expected to change by 1.6%, 1.2%, and 2.7% respectively, with a total increase of 0.9m units. Replacement passenger, light truck and truck tire shipments are also projected to change by 0.8%, 1.0%, and 0.8% respectively, with a total increase of 2.2m units. (See table above)

Germany rubber industry association the WDK reported that production fell 4.3% year-on-year overall to 1.1m tonnes, reflecting a 4.3% decline in tire production to 450kt and 4.4% decline in general rubber to 650kt. Overall industry sales dropped to €11.3bn, down 1.1% compared to 2023, though combined investment by both tire and general rubber segments increased 1.4% to €740m. Sector employment dropped 4.4% year-on-year, with tires seeing a 2.1% decline to 18,400 people and general rubber down by 5.3% to 44,600 people. Tire industry capacity utilisation grew 8.1% over 2023 to 79.3% while general rubber goods utilisation rates fell 9.0% to 73.9%.

Germany’s chemicals industry association the VCI reported that in Q4/24, production fell by 4.2% quarter-on-quarter and 1.2% year-on-year, with petrochemicals and polymers seeing particularly sharp drops. Capacity utilisation remained “below the break-even point” at 74.7%, down from 74.8% the previous quarter. Total sales in the chemical and pharma industry increased slightly compared to the previous quarter to €53.1bn but were down 1.5% compared to Q4/23. Domestic sales fell by 1.4% sequentially to €19.5bn, down 4% compared to Q4/23. Foreign sales rose 1.4% quarter-on-quarter to €33.6bn.

BUSINESS

Brazil is to extend antidumping duties on the imports of Chinese car tires. A 13 Feb preliminary ruling covered 65 and 70 series car tires with rim sizes of 13“ and 14” and tire widths of 165 mm, 175 mm and 185 mm. Following a third sunset review, the trade authority recommended that the dumping duties should be extended by two months until 25 May, when the review is completed. Initially imposed in 2009, the duties were most recently extended in 2019 and currently range between $1.25-$1.77/kg.

TKH has reported strong growth in sales and earnings for its ‘smart manufacturing’ division, to which tire-building systems major VMI contributed 83% of revenues. Adjusted for currency effects and divestments, turnover at ‘smart manufacturing’ grew organically by 11.1% year-on-year in 2024. The order book, at €501.5m, decreased by 15.2% year-on-year organically. ‘Added value’ increased to 51.5%, from 50.5% previously. EBITA grew 31.1% organically to €116.1m

Under its new 10-year strategy (Rise 2035), Sumitomo Rubber Industries aims to grow the proportion of premium tires to 60% of total tire sales, from 40% currently. It also aims to see 70% of its earnings derived from tires by 2035, with the other 30% coming from non-tire developments. The ratio currently stands at 87% tires and 13% non-tire. Other targets include: raising profit margin from 7% to 10% in 2027, and 15% by 2030-35; increasing return-on-equity to 12% in the long-term; and improving return-on-invested-capital (ROIC) from 6% to 8% for 2027, targeting 10% for 2030-35.

SHARE PRICES

Leading tire manufacturers’ share-price trends

Leading rubber product manufacturers’ share-price trends

MATERIALS

Natural rubber futures remained weak for the second week in a row, weighed down by slowing global economy and threats of global trade war. The trading week ended 7 March closed lower across all major exchanges amid fresh selling and long liquidation, Japan Exchange Group (JPX) reported.

JPX: Selected rubber futures price trends on major trading exchanges

 (ERJ calculation for selected futures)

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