New common standard for composite rubber raises concerns in industry

The new standard for composite adhesives, which will be implemented on July 1, will close the door to composite adhesives imports. In this way, in the near term, the ton use cost of imported natural glue will increase by 1500 yuan (note: import tariff of technical classification of natural glue will be raised to 20% or 1500 yuan/ton from 2015, both from the low). In the far distance, it will aggravate the global oversupply of natural glue, but not conducive to the price of glue. In this way, it is difficult to achieve the purpose of improving the income of rubber farmers, and will make tire enterprises very injured. At the recently held 2015 China Rubber Annual Conference, many enterprises expressed concerns that the newly revised General Technical Specifications for Composite rubber will bring about a "zero-sum game".

1.6 million tons of composite rubber imported doorless rubber industry cost increased by 2.4 billion yuan.

Shen Jinrong, chairman of Zhongce Rubber Group Co., Ltd. gave such a set of data: In 2014, China's natural rubber supply, imported technical classification of natural rubber 2.61 million tons, imported composite rubber 1.6 million tons, domestic natural rubber 850,000 tons. The new regulation that the content of raw rubber does not exceed 88% makes the composite rubber no longer available as the traditional rubber material, which actually closes the door of China's composite rubber import. If calculated in a simple way, 1.6 million tons of imported composite rubber is changed to the form of technical classification of natural rubber import, and at 1500 yuan/ton tariff, Chinese rubber processing enterprises will increase the annual cost of 2.4 billion yuan.

"The effect of the United States to our light truck tire and car tire 'double negative' has appeared, domestic tire enterprises start rate decreased rapidly. The new standard for compound rubber, which will be implemented on July 1, will have a huge impact on China's tire industry, and its impact may exceed the adverse impact of all other external causes." Shen Jinrong expressed concern.

In fact, the economic benefits of Chinese tire companies are declining. Deng Yali, president of the China Rubber Industry Association, said, "Now, the main economic indicators leading to the product tire are declining, especially the product sales revenue and profit are declining. "The only thing that hasn't fallen is inventories, and the big rise in inventories is one of the most obvious signs of a struggling business." According to the statistics of the member enterprises of the Chinese Rubber Association, in January to February 2015 radial tire production decreased by 5% year-on-year, and the export delivery value decreased by 9% year-on-year.

Shi Yifeng, secretary general of the tire branch of the China Rubber Association, said the new label will cost the tire industry more than 2 billion yuan a year. For tire enterprises with low profit margins, the new standard of composite rubber will restrict the structural adjustment and transformation and upgrading of enterprises, forcing tire enterprises to use more processing trade, which may once again increase the risk of the tire industry suffering from international trade protectionism.以上翻译结果来自有道神经网络翻译（YNMT）· 通用领域

According to Shuangqian and other tire enterprises, after the announcement of the new standard of composite rubber at the beginning of this year, international suppliers quietly raised the price of composite rubber, which has begun to affect the production cost of tire enterprises.

The supply and demand balance may break again the natural rubber growing industry may not benefit

In the tire industry feel very hurt at the same time, the domestic natural rubber planting industry can really benefit?

Natural glue is one of the four strategic materials. The self-sufficiency rate of China's natural glue has been below the industrial safety line of 30% for many consecutive years, and it is lower than 20% in recent years.

In 2009, the import volume of composite glue exceeded 1 million tons for the first time, and the price of natural glue was only 12,000 yuan per ton. The standard had been in place for years when natural rubber prices soared to an all-time high of 43,000 yuan per ton in 2011. Since then, the standard of composite glue has not changed, the price of natural glue has fallen all the way from 4 to 1. Thus, the standard of composite rubber is not the determining factor of the price of natural rubber.

According to traders, the global surplus of natural glue began in 2013. Previously, natural rubber prices are much higher than synthetic rubber. Traders purchase a large number of natural rubber, free trade zone once burst warehouse, indirectly promoted the price of natural rubber down. In 2014, the global supply and demand of natural rubber has been basically balanced.

The new regulation that the raw rubber content should not be greater than 88% (mass fraction) makes the composite rubber become a new "composite material", and the versatility is greatly reduced. 88% compound rubber tire enterprises have been unable to directly use. The proportion of composite glue imported from China is very large. 1.6 million tons of composite glue not only accounts for 38% of the total import volume of natural glue in China in 2014, but also accounts for more than 12.5% of the total supply of natural glue in the world. Therefore, the adjustment of the standard of composite glue will likely break the global supply and demand balance of natural glue again, and then significantly lower the global price of natural glue. Falling international prices are bound to drag down domestic prices.

The use of natural gum may fall in India's past lessons should be learned

In fact, in 2014, the price of natural rubber continued to fall, while the price of synthetic rubber was relatively stable. In the case of not affecting the performance, domestic rubber processing enterprises began to use a large number of synthetic rubber to replace natural rubber.

According to Shen Jinrong, in 2014, China's full steel radial tire production increased by about 5%, half steel radial tire production increased by about 13%. Full steel radial tire consumes more natural rubber, half steel radial tire consumes more synthetic rubber, supposedly should be synthetic rubber consumption increase. However, it is estimated that in 2014, China consumed 4.8 million tons of natural glue, 14.2% more than the previous year; About 4 million tons of synthetic glue were consumed, 2.44% less than the previous year. One of the main reasons is that in 2014, the price of natural glue continues to fall, while the price of synthetic glue is relatively stable, and the price-ratio relationship is reversed. A large number of places where synthetic glue should be used are replaced by natural glue. Rough estimate, tire enterprises because of replacement and more than 400,000 tons of natural rubber consumption, coupled with other rubber processing enterprises, the total domestic replacement amount is more than 600,000 tons. In 2013, natural glue consumption accounted for 50.6% of the total glue consumption (natural glue + synthetic glue), which had risen to 54.15% in 2014, and the proportion of natural glue was significantly increased.

Once the new standard of composite rubber takes effect, rubber processing enterprises have to import technology to classify natural rubber. The tariff of 1500 yuan per ton increases the cost of using natural glue. Tire companies have been forced to use less natural rubber and more synthetic rubber.

Tire is capital, technology, labor "three intensive" industry, and completely dependent on resources of resource-based products. Before the rise of the Chinese tyre industry, India was a major supplier to the South and Southeast Asian markets. India's annual production of natural glue is 800,000 to 900,000 tons, and demand is 1 million to 1.1 million tons. To protect its natural rubber industry, India imposes import duties of 20 to 25 percent on natural rubber. But now the development of the Indian tire industry is not satisfactory, which in turn has a negative impact on India's natural rubber industry, one of the reasons is that the cost of rubber is too high. This "ahead" lesson is indeed worth paying attention to.