Increased demand from China and the recovery of the Japanese automotive industry after the earthquake have resulted in a surge in demand for tires, but the downside is that it has also increased the price for rubber, according to Bloomberg
During the first half of 2011, China has produced more cars than GM and Volkswagen put together, and Japan has seen its largest increase in sales in the past three decades. Demand for new tires will thus reduce the global rubber stocks to 12 percent in 2012, according to a market analysis from Citigroup.
As a result, prices could rise by 18 percent by December, and should be felt by end consumers.
“There are pessimistic views about economies as concerns grow over Europe’s debt crisis, but we cannot ignore the fact that auto sales in emerging markets are still expanding,”
said Tetsu Emori, the Tokyo-based chief fund manager at Astmax Co.