TOKYO—Zeon Corp.'s elastomers business has reported a major drop in its results for the first quarter, ended June 30, due to the weakening global economy, which was hit by the "languishing US-China trade friction" and the outbreak of COVID-19.
The business unit—comprised of rubbers, latex and chemicals units—both sales and operating income decreased "drastically" as a result of "sluggish demand" in the automotive and general industries.
The unit's operating income went into negative territory at $943,000, posting a 103 percent decline from $3.3 million reported in 2019, Zeon said July 31.
Overall elastomers sales, which represent more than half of total group revenue, fell 21 percent year-over-year to $349 million, reflecting a 13 percent decline in volumes to 128,000 metric tons.
In the rubber segment, revenue dropped 25 percent year-on-year to $226 million as volumes decreased 24 percent to 65,000 tons.
The segment particularly was hit by a decline in demand for both general purpose rubbers—mainly for tires—and specialty rubbers for automotive and general industrial products. Sales prices also decreased, due to the falling prices of raw material, Zeon said.
Sales of latexes declined 27 percent to $3.1 million for the quarter, as volumes decline 8 percent to 28,000 tons during the three months to end of June. Here, demand fell in the cosmetics and general industry, while sales prices declined due to low raw material prices.
Sales volumes of elastomer chemicals remained flat at 35,000 tons, but net sales fell 12 percent to $7.6 million as prices were lowered amid weak market sentiments.