Last September, I had the chance to return to China where I could see that the Chinese government was very serious with its environmental objectives. In fact, the Chinese people I talked with are supportive of this plan, as they have not seen blue skies for decades. However, the impact will be huge! We already see the price of chemicals and other polluting industries jumping… including that of tires!
Indeed, in all the various discussions I have had with various stakeholders, especially since last spring, government inspectors have visited the most polluting companies, including those in the rubber sector. In all, according to various sources (see links below), the government has asked about 170,000 companies deemed polluting to stop their production. For some other large companies, including some well-known in the field of low-end tires, their production time has been reduced by 25 to 50%, according to my sources.
For the time being, most industries still do not measure the real impact of this major change, but in the medium term, the price of low-end tires manufactured in China could increase by 25% in the North American market. Already in August, most prices in China have increased by 5% according to Rubber & Plastic News.
For those who would like to know more, there is little information on the subject so far, but I invite you to read the articles below.
Bloomberg BNA: China Waging ‘Unprecedented’ Pollution Crackdown
Rubber & Plastic News: China’s environmental inspection causes increased tire prices
Daniel Marleau – CEO LanOTR