TOKYO—Zeon Corp.'s elastomers unit has seen signs of market recovery, particularly in sales volume for rubbers, as demand in the tire market starts to rebound.
The business unit—comprised of "rubbers," latex and chemicals units—saw rubber volumes recover quarter-on-quarter to 82,000 metric tons during the second quarter. That's up from 65,000 tons in the previous three months.
Year-on-year, rubber volumes lagged 9 percent, Zeon said Oct. 30.
The Japanese materials supplier linked the increase in volume to a recovery in demand for general purpose rubber, mainly used for tires. Specialty rubber, used for car and industry applications, was slow to recover, Zeon added.
Net sales for the rubber segment, however, continued to decline, posting a 32 percent fall year-on-year to $208 million, down 8 percent compared to the prior quarter.
Sales of latexes remained steady for the medical/sanitary gloves, but demand was "still weak" in general industry. Sales volumes for the segment remained flat at 31,000 tons during the quarter, while net revenue fell 24 percent year-on-year to $30.6 million.
Rubber chemicals volumes rose 8 percent year-on-year to 33,000 tons, helping push sales up 1 percent to $75.5 million.
Overall, the elastomers unit posted sales of $327 million, down 24 percent compared to the same quarter a year ago.
Zeon said revenue was impacted by lower volumes outside Japan, due to the COVID-19 effects, exchange rate translation and lower prices.
The unit's operating income went into the black, at $8.6 million, after reporting a loss of $956,000 in the first quarter. Year-on-year the figure was down 64 percent.
Zeon linked the improvement in operating income to a 43 percent positive impact from lower raw material prices and a 10 percent improvement in SG&A.