Mixed news on the raw material front, as natural rubber prices rose to 36.75 cents/pound, the highest price for eleven weeks. Fear of a supply shortage was the cause. Crude oil prices fell slightly, following the ten-year high prices of last month.
The news group Reuters has been named as sponsor of the BMW-Williams F1 team for three years. In December, BMW and oil company Castrol announced that they would work together but the main sponsor was only revealed today.
There are rumours in the market that the industry will raise tyre prices – maybe even this week – to cover increases in raw materials (rubber, oil, carbon black). As production capacities have been expanded during the last 24 months, it is doubted whether any increase will stick due to market pressure.
The German Rubber Association W.d.K. (Wirtschaftsverband der deutschen Kautschukindustrie) has announced that total sales of rubber goods increased 4.4 per cent in the first quarter of 2000. Sales of technical products rose 5.8 % and tyre sales increased 3.3 %. However, the W.d.K. continues to worry about increasing material costs (rubber, oil, carbon black).
In the past few days, oil prices have risen US$4.20 to US$26 per barrel. This has caused concern among tyre manufacturers as raw materials comprise about 40-50% of the cost of sales.
