PROJECTS
Nokian Tyres has started tire deliveries from its new €650m tire plant in Oradea, Romania, via its distribution centres to central European customers and consumers. Nokian opened the ‘zero-emission’ unit near the Hungarian border last September, and expects the full ramp-up to 6m units of passenger car tires by 2027.
M&A & RESTRUCTURING
Bridgestone Hispania Manufacturing announced planned cutbacks at its agricultural truck & bus radial (TBR) tire plant in Puente San Miguel (Cantabria), and the TBR tire factory in Basauri (Basque Country) due to “profound changes” in the European tire market. The decision is to impact 546 employees across the two factories.
Pirelli & C. SpA postponed key board resolutions and rescheduled its annual shareholder meeting citing efforts to find "a solution that will allow the company to adapt to the new regulations of the American market." Among the issues facing Pirelli in the region are those around its largest shareholder Chinese group Sinochem, which currently holds a 37% stake in the Milan tire group. In particular, the Washington administration is increasingly intensifying its scrutiny of and restrictions on China-linked software and hardware being used on US roads.
Trelleborg Industrial Solutions on 2 April announced the acquisition of the extruded rubber profiles and gaskets operation of National Gummi AB from the Swedish industrial group National. With a production base in Halmstad, Sweden, the acquired business supplies the construction, industrial and automotive industries, generating 2024 sales of SEK150m (€14m) in 2024, principally in Northern Europe.
On 1 April, Hongdou Group signed an agreement to sell 24.5% of shares in Chinese tire maker General Science to Soho Holding, controlled by Jiangsu provincial authority, for Yuan2.1bn (€270m). With the transaction, General Science is now controlled by Jiangsu 'provincial state-owned assets supervision and administration commission'. Hongdou retained a 8.32% holding in the tire maker with the remaining 67.18% held by the public.
MARKETS
The global tire market is expected to remain subdued in the first half of 2025 due to the uncertain economic and political outlook, according to steel cord reinforcement supplier Bekaert. While “changes in duties will impact supply-chains,” Bekaert said it is “potentially well positioned to mitigate [the effects] given our more local footprint and alternative sources of supply from various low-cost countries.”
Sales of the 10 largest Chinese tire & rubber machinery makers – excluding top player Mesnac* – increased by over 26% in 2024, compared to the prior-year level, data from the Chinese Rubber Machinery Association shows. The performance builds on year-on-year sales-growth of 12% recorded in ERJ’s annual Tire & Rubber Machinery survey last year. *The table was compiled before figures were available for Mesnac, which topped the ERJ Tire & Rubber Machinery Survey 2024, with sales of $606m.
German automotive parts suppliers association ArGeZ said the sector remains in deep structural crisis, with production falling 4.9% year-on-year in 2024 and sales down 4.7% compared to the year before. Capacity utilization was estimated at just 71.7%, while the industry shed around 2.4% of its workforce – about 20,000 employees – in 2024. Business sentiment remained deeply negative, with only 12% of companies rating their situation as “good.”
BUSINESS
In a 25 March investors presentation, Michelin said it expects full-year earnings (segment operating income) to surpass the 2024 level of €3.4bn. For 2025, Michelin predicts year-on-year growth of between -2% and 2% in the passenger car & light truck market, with OE demand expected to recover. The truck tire segment is projected to see growth of between -1% and 3% with a strong second-half recovery expected for the OE market. Specialities, including mining, off-road and aircraft tires as well as polymer solutions, are, meanwhile, projected to post growth of between -1% and 3% year-on-year.
For 2024, Bekaert’s ‘rubber reinforcement’ unit reported a 9.5% dip in third party sales, on 2.2% lower volumes and a 6.1% decline in passed-on material and energy costs amid “broadly stable” price and mix effects. Rubber reinforcement sales volumes fell 3% in Europe and N America, and by 5% in China. Underlying EBIT at ‘rubber reinforcement’ came in at €150m, down €34m from the prior-year level. Capex at the unit totalled €84m, including on projects in Vietnam and India.
HSBC Global Research has upgraded its rating for Michelin to ‘buy’, even though the tire group’s latest tire market volume data - for February – prompted the analyst to trim back its 2025 volume estimate by 1%. After a year-on-year dip of 7% in Q,1HSBC projects a progressive improvement in volumes during 2025, to come in just 1% below the prior-year level. Noting a cumulative 12% market contraction between 2021 and its 2025 estimate, the firm identified speciality tires as the “main negative”: a 9% drop in 2024 to be followed by a 3% decline this year. However, the analyst expects Michelin's 2025e adjusted EBIT to be 15% above its 2021 levels, and EPS [earnings per share] 23% above.
Lanxess AG’s speciality additives segment, which includes Rhein Chemie, posted earnings (EBITDA) of €227m, up 8.6% compared to 2023. Segment sales declined 5% year-on-year to €2.2bn despite high volumes across “almost all” business units, said Lanxess. Revenue decline was due, in particular, to lower selling prices as Lanxess passed on lower raw material and energy costs. The earnings gains were linked to better capacity utilisation and lower costs.
Waste tire pyrolysis company Pyrum Innovations AG and bicycle tire maker Schwalbe concluded a 10-year purchase agreement for Pyrum's recovered carbonblack (rCB). This is Pyrum’s second long-term rCB off-take agreement, following a similar deal with Continental last July. Under the deal, Schwalbe has agreed to expand its supply of used bicycle tires to Pyrum for recycling. Schwalbe said it is already using Pyrum's rCB in 70% of its tires…
US TARIFFS
Major exporters of low-cost tires China, Thailand, Vietnam and Cambodia are among 60 countries targeted by new US import duties announced on 2 April. To take effect on 5 April, the new duties include a 54% tariff on goods from China, 46% on Vietnam, 36% on Thailand, and 49% on Cambodia. The duties are in addition to a sweeping 10% duty on all US imports. In 2023, Thailand was the top tire exporter to the US, with shipments valued at $3.3bn, while Vietnam ranked fifth, exporting over $8.5bn worth of goods. Chinese tire exports to the US, however, have slowed down in recent years due to existing tariffs.
Among a vast range of import tariffs, US president Trump on 26 March announced a 25% duty on the import of all cars and automotive parts into the US. In response, ACEA director general Sigrid de Vries urged the Trump administration to consider the negative impact “not only on global auto makers but also on US domestic manufacturing.” European car makers, he said, have invested heavily in the US for decades and currently export between 50% and 60% of the vehicles they make in the US. (See also ACEA EU-US Trade Fact Sheet).
With regards to US trade tariffs, HSBC Global Research said Michelin’s 80%-plus, US localisation rate made it “the most hedged auto parts supplier under our coverage, after Goodyear.”
German automotive parts suppliers association ArGeZ highlighted concerns over the US imposition of 25% tariffs on the imports of cars from April, and car parts from May. ArGeZ urged the European Commission to negotiate a resolution, warning that shifting production outside Europe could disproportionately harm smaller suppliers.
SHARE PRICES
Leading tire manufacturers’ share-price trends
Company
|
27-28 March
|
3-4 April
|
Change
|
Bridgestone
|
Yen6,213
|
Yen5,717
|
-8.0%
|
Goodyear
|
$9.30
|
$10.03
|
+7.9%
|
Hankook
|
KRW41,800
|
KRW39,050
|
-6.6%
|
Michelin
|
€32.62
|
€31.93
|
-2.1%
|
Nokian Tyres
|
€6.43
|
€6.17
|
-4.0%
|
Pirelli
|
€5.56
|
€5.33
|
-5.8%
|
Sumitomo (SRI)
|
Yen1,985
|
Yen1,606
|
-19.1%
|
Leading rubber product manufacturers’ share-price trends
Company
|
27-28 March
|
3-4 April
|
Change
|
Avon Technologies
|
£14.78
|
£14.60
|
-1.2%
|
Cooper-Standard
|
$16.25
|
$13.93
|
-14.3%
|
Datwyler
|
CHF118.0
|
CHF115.0
|
-2.5%
|
Hexpol
|
SEK91.65
|
SEK85.30
|
-6.8%
|
Semperit
|
€14.90
|
€13.14
|
-11.8%
|
Trelleborg
|
SEK391.8
|
SEK353.4
|
-9.8%
|
MATERIALS
Natural rubber
The Rubber Trade Association of Europe reported a flat trend in pricing for natural rubber grade TSR 20 over recent months – contrary to the impression presented by its graph (above). The price range over the past three months has not exceeded 19 €cents/kg CIF, said RTAE – noting that the market saw a 9 €cents/kg drop in freight rates at the end of January. During February, the TSR 20 price “scarcely spanned 10 €cents/kg and for most of the month remained dormant in a 5 €cents/kg range,” the association added in its latest monthly digest.
Natural rubber pricing remained under pressure in the final week of March as trade uncertainties continued to weigh on the market. Rubber futures closed lower across all major Far East exchanges for the week ending 28 March, following the Trump Administration's decision to impose additional tariffs on imported cars and car parts, said Japan Exchange Group (JPX). According to JPX, a decline in open interest across exchanges points to cautious sentiment and falling trading volumes.
JPX: Selected rubber futures price trends on major trading exchanges
Exchange
|
Commodity
|
Delivery
|
Week to 21/3/25
|
Week to 28/3/25
|
% Change
|
Osaka
|
RSS3
|
Jul‘25
|
349.0 (JPY)
|
349.8 (JPY)
|
+0.2%
|
SHFE
|
SCR/RSS
|
Sep ’25
|
17,195 (CNY)
|
17,035 (CNY)
|
-0.79
|
INE
|
TSR
|
Jun ‘25
|
14,625 (CNY)
|
14,555 (CNY)
|
-0.5%
|
SICOM
|
TSR20
|
Sep’25
|
198.5 (US$c)
|
195.3 (US$c)
|
-1.6%
|
SHFE
|
BR
|
Jun‘25
|
13,590 (CNY)
|
13,565 (CNY)
|
-0.2%
|
(ERJ calculation for selected futures)
Previous ERJ Week in Numbers