The investigation of emulsion SBR imports at the International Trade Commission featured a fairly typical set of plausible but mutually exclusive arguments.
Lion Elastomers L.L.C., the one surviving petitioner in the antidumping case (the other, East West Copolymer L.L.C., went bankrupt earlier this year), claimed that ESBR importers from Mexico, Brazil, South Korea and Poland have caused ESBR price reductions in the U.S. market of 35 percent since 2012.
Tire manufacturers, according to Lion, have leveraged import competition to demand ever lower contract prices for ESBR. Overcapacity for the synthetic rubber abroad—a fact no one denies—plays directly into underselling, Lion insists.
Backed by Cooper Tire & Rubber Co., the importers argued conversely that the ESBR market is driven by close relationships between suppliers and customers, with price as a secondary factor. Stable supply and customer service are what tire makers are looking for, they say, as well as a diversified product portfolio that allows for a switch to solution SBR and other alternatives. As U.S. tire production evolves toward higher-performance tires, they claimed SSBR will gain market share at the expense of ESBR.
The opposing views show one of the axioms that holds true in the manufacturing and marketing of ESBR, as well as most elastomer materials: If anyone asked if rubber is a price-driven or a relationship-driven industry, the answer would be, "Yes."
The tire and rubber industries are notoriously low-margin, in which a fraction of a cent per unit can mean the difference between success and failure. Yet they also are industries in which personal relationships can mean everything.
It is hard to say how many household names in the industry have been created over a handshake, a steak dinner or a round of golf. You need only name Henry Ford and Harvey Firestone to make that point. Of course, those personal relationships can erode with time and explode with a scandal. You need only use the name "Ford Explorer" to recognize that.
The rubber industry is a complex one, ruled by proprietary research and development, delicate deal making, and an unavoidable, unpredictable human factor. It is no surprise that domestic and foreign ESBR producers should advance totally different narratives about ESBR imports that sound equally plausible.