Raw (Materials) Deal
(Akron/Tire Review) The volatility of the world’s political climate, the unpredictable weather in North America and El NiÑo in the Pacific Ocean are having very expected outcomes in terms of the cost of raw materials for the tyre industry.
Oh yes, and then there’s China. The economy of the world’s most-populous country continues to grow faster than kudzu in the South. By any western measurement, China growth curve and ravenous industrial appetite throws another concern into the long-term raw materials picture: seemingly endless increases in demand.
And, through all of this, the mission for tyre manufacturers remains as it has for many years: long-term flexibility and the ability to trim rising production costs.
But, today, the tides of the raw-material-cost ocean appear to be ebbing. Providing that world politics don’t worsen or there are several devastating weather events, tyre manufacturers believe that, despite current volatility in rubber prices, raw material costs will remain relatively stable in the short term.