Natural rubber prices rose 20% in 45 days

Since September, natural rubber prices have also continued to rise.

The data shows that the price of Shanghai Rubber Futures has exceeded 30,000 yuan / ton, the highest in recent days has been close to 32,000 yuan / ton price increases of up to 20%, after the National Day holiday, rubber has become the leading product of bulk products.

For tire manufacturers, the main costs are labor costs, raw materials, depreciation of fixed assets and utilities, of which raw materials are mainly natural rubber, synthetic rubber, nylon cord fabric, steel wire and carbon black. Rubber costs account for approximately 50% of the total tire production cost.

Therefore, the price of rubber is one of the most sensitive aspects of the tire manufacturing company and directly determines the profitability of the company. The price of natural rubber soars, and the most distressing days of the day are probably tire companies that use natural rubber as their main raw material.

Why is the price of natural rubber skyrocketing?

According to statistics, as of October 9th, natural rubber (privately run) in Hainan Province was completely shut down, with a cumulative reduction of production of more than 10,000 tons and a total reduction of over 10,000 tons of dried rubber. And Hainan's natural rubber accounts for 47% of the country's total output. The reduction in production will have a serious impact on the national supply.

Some analysts pointed out that the drought in Yunnan and the heavy rain in Hainan at the beginning of the year have affected the two major natural rubber producing areas in China. This is an important factor in the insufficient supply of natural rubber in China this year. During the National Day, the heavy rains in Hainan Province were severely damaged. As a major natural rubber producing area in China, after such a severe natural disaster, it will also significantly reduce production.

At the same time, the market demand for tires continues to grow.

China Association of Automobile Manufacturers released the latest September automobile production and sales data show that: in September this year, the domestic automobile production and sales doubled over 1.5 million. From January to September, the production and sales of automobiles reached 13,087,700 cars and 13,138,400 vehicles, an increase of 36.10% and 35.97% year-on-year, basically reaching the level of production and sales last year, and this year is expected to reach 17 million vehicles, which means that the sales of new cars in China will reach US history. At the highest level, it has become the world's largest new car market.

In addition, the promulgation and implementation of the “Tire Industry Policy” of the Ministry of Industry and Information Technology has also played a role in fueling the rise in Hujiao's price.

Some analysts believe that this policy will benefit the tire industry, and will drive the entire industry chain. The rubber in the upper reaches of tires will thus benefit greatly.

Cai Weimin, secretary general of the China Rubber Industry Association’s tire division, said that the reason why natural rubber hit record highs is that there are currently rising prices for raw material resources; rubber demand has risen sharply; exporters that produce natural rubber have limited exports; climate impacts have led to local production cuts; Futures market funds speculation.

Tire listed company performance will continue to deteriorate?

It is understood that currently listed tire manufacturers in the country are Tire A, Qingdao Double Star (000599, stocks), Aeolus (600469, stocks), S Giti, ST Huang Hai, and Shuangqin (600623, stocks).

The price of natural rubber has risen sharply, and the cost of tire companies has risen sharply. How are these companies?

According to the 2010 semi-annual report, Shuangqian shares and ST Huanghai’s performance in the first half of this year have increased, but other companies’ net profit in the first half of the year has declined compared to the same period of last year. Among them, the tires A tires in the first half of this year's performance was only 75.927 million yuan, down 32.35% year on year; S Giti net profit was 11.6787 million yuan in the first half of this year, a sharp decline of 81.11% year-on-year.

As for the decline in performance, the above-mentioned companies have made raw materials rise as the main reason in the semi-annual report.

Due to the rising prices of natural rubber, these three quarterly reports of these companies are even less optimistic.

Qingdao Doublestar expects to see a sharp decline in its first three quarters of this year. Net profit for January-September will be about 5 million yuan, a decrease of 50%-100% from the same period last year of 22,480.54 million yuan, and a basic earnings per share of about 0.01 yuan. The same period of the year was 0.43 yuan.

Among them, the net profit in the third quarter is estimated to have a loss of 5.98 million yuan, a decrease of 100% to 150% from the same period of the previous year of 91,723,200 yuan; the basic earnings per share of -0.01 yuan.

The company explained that the main reason for the change in performance was that compared with the same period of last year, the prices of main raw materials such as natural rubber were affected by the domestic and foreign markets and continued to operate at high levels. At the same time, the investment in the tire industry was overheated, the market competition was fierce, and the price increase of products was limited. The profitability of tire products has fallen sharply.

It is understood that the assets transfer of the Qingdao Double Star shoe business has been completed and Qingdao Double Star Celebrity Industrial Co., Ltd. has received the assets. Tire income and profits are currently the main source of company revenue and profit.

Similarly, ST Huanghai is forecasting the first loss in the third quarter of 2010. The main reason for the loss is expected to be that raw material prices will still be operating at high levels in the second half of the year.

é»” Tire A (000589, shares it) Executive Secretary Li Shangwu said in an interview with the "Securities Daily" reporter that natural rubber prices have a greater impact on the company, the cost increase is almost doubled, raw material prices, the downstream companies basically have no way to deal with The price of tires has also risen, but it has not kept pace with the price increase of natural rubber. The performance of the three quarterly reports should have an adverse effect, but the details are still unclear.

"The company's cost pressures have increased, and tire prices have also risen. In recent years, the price of natural rubber has fluctuate greatly," said the person in charge of S.Getter.

At the same time, Fengshen shares secretarial secretary Han Faqiang also told reporters that the tire prices of all tire companies have risen, this is a matter of rising, the increase rate is hard to say, the tire variety is too complicated. The most direct response to the business is to continue to increase prices or cut costs.

It is understood that since the beginning of this year, a number of large-scale tire companies abroad have repeatedly raised the price of tires, and some companies have up to four times. The price increase rate is close to 20% in total, and there will be more tire companies increasing tire prices after November 1st.

Guoxin Securities analyst Chen Aihua said in an interview with the “Securities Daily” reporter that the price of natural rubber began to rise slowly from August and began to skyrocket in September and October. For tire companies, there is no doubt that cost pressure will increase. The ones that can be passed on are passed on, otherwise they can only continue to push down the gross margin.

Tire branch statistics show that from January to August this year, the domestic gross profit margins of 45 tire companies decreased by an average of 1.12 percentage points.

Chen Aihua also said that due to different types of tires, the market is also different, so the price range varies, probably between 3% -10%. And its various varieties are not the overall price increase, but slowly increase from some varieties, or downstream companies can not afford.

“The price increase of tire products lags behind the price increase of natural rubber, while the price increase rate is also smaller than the price increase rate. From the current point of view, tire companies will not have much bright spots this year, with the continuous rise in natural rubber prices, the fourth quarter I am afraid that the performance will be even worse. The overall gross profit margin of tire companies is declining, and companies with good profitability are still making profits, but companies with weak profitability have begun to lose money, she said.

Cai Weimin also said in an interview with the media that the company’s production before September was still using natural rubber stocks before the skyrocketing prices. The real skyrocketing of natural rubber began in September, and it is foreseeable that tire companies will The data will be more pessimistic.