GUANGDONG, China—The U.S. antidumping tire tariffs affecting $3.3 billion worth of products and the antidumping investigation on Chinese tires by the Customs Union of Belarus, Kazakhstan, and Russia is casting a long shadow on China's tire manufacturing sector, delegates of the 2015 China Rubber Conference in Guangzhou were told.
China's export of passenger car and light truck tires to the U.S. takes up a third of such tires' world total export volume, or 15 percent of the global output, according to Shen Jinrong, chairman and general manager of the Zhongce Rubber Group, a China-based tire manufacturer.
China's tire makers' operating rate is plummeting. In February the China Rubber Industry Association tire subcommittee's member companies had a 5 percent year-on-year decrease in radial tire output.
With those factors taken into account, Shen still considers China's new standard for compound rubber imports an even bigger threat.
According to rubber sector veteran, the new standard intends to raise domestic natural rubber price. However, last year China's natural rubber output was 850,000 tons, or 17 percent of its total natural rubber consumption (including compound rubber).
The new standard redefines the tariff-free compound rubber with a maximum of 88 percent crude rubber in its composition as opposed to the current standard of 95 to 99.5 percent, forcing Chinese companies to import natural rubber with a $237.5 per ton tariff or to switch to synthetic rubber if possible.
In 2014, China imported 1.6 million tons of compound rubber and, under the new standard, would mean a $386.1 million cost increase for China's rubber sector companies, according to Shen.