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China Rubber Net News "Last year, companies in the tire industry have gone bankrupt, and the industry's efficiency has fallen by more than 30%. The Chinese tire industry is now in a critical moment! If the new standards for compound rubber are implemented at this moment, it will undoubtedly worsen the tire industry, and It will surely affect the entire upstream and downstream industries. "On June 14th, at the briefing meeting on the progress of the US tire" double-reverse "case held by the China Rubber Industry Association in Dalian, dozens of tire companies participating in the meeting mentioned that they will be in July. The national standard for composite rubber, the General Technical Specification for Composite Rubber, which was implemented on the 1st, requires the association to reflect the demands of tire enterprises to relevant national departments on behalf of enterprises, and requires standard setting departments to consider the actual situation of the industry and suspend the implementation of new standards for composite rubber.
Controversy over the development of new standards
Xu Wenying, secretary general of the China Rubber Association, introduced that from the national standard setting department, in the process of formulating industry standards in China, no standard has caused such a large controversy as composite rubber, and it was promulgated under serious controversy. The compound rubber standard is unique.
Although the tire industry raised resolute opposition during the development of the new standard, the General Technical Specification for Composite Rubber was still open for comment last August. For this reason, tire companies have put forward objections during the one-week comment period, explained the reasons for the objections, and put forward suggestions for amendments. The China Rubber Industry Association also reported to the relevant ministries and commissions several times, clearly raised objections, and elaborated on the inoperability of the compound rubber standard change and its significant impact on the tire industry. It also proposed measures to solve the problem. However, on December 31, 2014, the General Technical Specifications for Composite Rubber was still officially released, and it is planned to be officially implemented on July 1 this year.
In view of the fact that the raw rubber content of the compound rubber in this standard is greatly reduced from more than 95% to 88%, in fact the compound rubber has become a new "composite material", which is no longer in the category of raw rubber. Use has a huge impact. According to China Rubber Network, tire standards have been actively exploring how to use this "new material" since the standards were brewed, but after more than a year of practice by upstream and downstream companies, it has proved that the new standards are technically and operationally difficult. Realized. The new standard has little effect on alleviating the difficulties of the natural rubber plantation industry and is indirect, but the damage to the tire industry is direct and huge. If the new standard for compound rubber is implemented, tire companies will not be able to operate at all, which is equivalent to closing the door to import of compound rubber.
Xu Wenying introduced to the China Rubber Network reporter that after the standards were introduced, the association reported to the relevant ministries and commissions many times, reflecting the irrationality of the new standard and the various inoperability in the implementation process. We urge the standards setting department to consider that the tire industry is in the United States In the special difficult period of "double-reverse", the implementation of the new standard for composite rubber is suspended. On June 4, the standards department convened a forum with relevant ministries and related associations and enterprises to discuss the implementation of composite rubber standards. Participants from relevant ministries and commissions, associations, tire companies, and the National People ’s Congress deputed that it is not appropriate to implement the “double countermeasures” on China ’s tires in the United States, and the new standards are currently not controversial. Originally, the tire industry had great hopes for this meeting, thinking that with so many objections, the implementation of the new standard for composite rubber may be suspended, but no exact news has been heard so far. July 1 is now approaching. This is very anxious and worrying.
"We believe that the natural rubber planting and tire manufacturing industries are interdependent upstream and downstream relationships. If the development of the tire industry is greatly affected, it will inevitably increase the plight of the natural rubber industry and make the natural rubber market more depressed. Therefore, we hope National policy standards can take into account the common development of the two industries, and any policy that hurts one party will not benefit the other. "Xu Wenying emphasized to the China Rubber Network reporter.
Double pressure on the tire industry
Deng Yali, president of the China Rubber Association, said that in the past year, China's tire companies have faced two obstacles. One side is that “grain” (composite rubber) cannot enter, and the other side is that the market (American “double-reverse”) cannot go out. The situation is extremely severe. Since last year, the economic operation of the tire industry has been declining. This year, tire production is declining, which is unprecedented.
The US Department of Commerce announced the final ruling on the "double counter" of our passenger car and light truck tires, ruling that the combined anti-dumping and countervailing margin rates were 30.61% to 107.07%, of which the tax rate was 38.79% for enterprises and the national tax rate was 107.07%. China's key state-owned tire companies and 11 companies that have not been proven to be irrelevant to the status of state-owned enterprises have been awarded discriminatory national tax rates as high as 107.07%. This is tantamount to announcing that the US market has been closed, and more than $ 3 billion in exports have been almost blocked.
According to customs statistics, from January to April, China ’s tire export data fell across the board. The export of auto tires was 1.61 million tons, a year-on-year decrease (the same below) of 4.2%; the export delivery value was 4.28 billion US dollars, a decrease of 16.3%. From January to May, the export volume of automobile tires decreased by 25.7%, and the export delivery value decreased by 34.6%; the effect of "double counter-reflection" in the United States appeared, of which the export volume of new rubber pneumatic tires for motor passenger cars to the United States fell by 61.4%.
According to the statistics of China Rubber Industry Association, from January to April, the tire output of the statistical enterprises decreased by 7.33%, the export volume decreased by 10%, the sales revenue decreased by 14.32%, and the realized profit decreased by 32.51%. Among the 42 statistical companies, the loss was 436 million yuan, an increase of 171%, and the loss was 23.81%; of which the domestic-funded enterprises had a loss of 39.51 million yuan, an increase of 199.52%. In addition, according to the statistics of the China Rubber Association's statistical reports from January to May, the tire output of statistical enterprises decreased by 8.27%, and the inventory (value) of finished products increased by 11.4%.
"The adjustment of the compound rubber standard has caused great damage to the industry. If Chinese tire companies do not do well, there will be a tide of closure." Shen Jinrong, chairman of Zhongce Rubber Group, believes that tire companies can only buy high tariffs if they cannot import compound rubber. The general trade of natural rubber or the increase of processing trade natural rubber imports. If the rubber is imported under general trade, the tariff alone for the entire industry will increase the cost by 2.4 billion yuan, and the cost of tire production will increase by 5%. This is only a direct cost increase for tire companies under static conditions, while dynamic indirect costs cannot be calculated.
Shen Jinrong further analyzed that in 2014, the global natural rubber production was about 12 million tons, and China imported 1.6 million tons of composite rubber, accounting for about 13% of the global natural rubber production. If such a large amount of rubber cannot be sold, the global natural rubber will be in surplus. To what extent? The apparent consumption of natural rubber in China last year was 5.07 million tons, and domestic rubber accounted for only 800,000 tons, and most of them were full latex, which could not be used for tire production. He told the China Rubber Network reporter that if the new standards are adhered to, not only the tire industry will be greatly harmed, but also the natural rubber industry will suffer a huge blow in the long run.
"The products involved in China's exports to the United States accounted for 15% of the total export volume, 15% of the tires could not go out, and 13% of the rubber could not come in. I dare not imagine what kind of result it will be." Shen Jinrong said.
Tire companies agreed that the results of the implementation of the new compound rubber standard: First, it significantly increased the cost of tire companies, significantly reduced the international competitiveness of Chinese tires, and severely damaged the national tire and rubber industry; second, it encouraged companies to import more natural rubber from processing trade. Export dependence is higher, which leads to more trade friction risks. Third, rubber companies will have to seek alternatives such as synthetic rubber, which will further increase the global natural rubber surplus and cause global natural rubber prices to fall further. It is conducive to the independent innovation of tire enterprises and suppresses China's tire industry at the bottom of the manufacturing chain.
Tire industry resolutely opposes implementation of new standards
"The basic principle of China's standard formulation is to promote industrial technological progress and transformation and upgrading, and to take into account the common development of upstream and downstream industries, and the formulation of composite rubber standards completely fails to achieve this goal, which severely hit the tire industry and did not protect it. The role of agriculture is fundamentally contrary to the basic principle of setting standards! "Sun Huaijian, chairman of the factory management committee of Jiatong Tire (China) Investment Co., Ltd., was unanimously approved by the CEOs of the participating companies. Everyone believes that the tire industry is in a particularly difficult time in the United States, and the implementation date of the new compound rubber standard coincides with the final ruling of the "double-reflection". The suppression of the Chinese tire industry will be fatal.
Shen Jinrong said that with the exception of India, no country in the world has imposed import duties on natural rubber. India's natural rubber is basically self-sufficient, and its imports are not large. However, China's situation is completely different. About 80% of natural rubber depends on imports, but high tariffs are imposed. This is the key factor that forces tire companies to use composite rubber. Foreign rubber producing countries subsidize rubber farmers when rubber prices are low, and levy export tax adjustments when rubber prices are high. We should also take such measures. We should not suppress the downstream to rescue the upstream. The end result is both losses.
According to statistics from the National Bureau of Statistics, the national tire industry's sales revenue in 2014 was more than 540 billion yuan. According to the China Rubber Network reporter, in the ranking of the world's top 75 tire companies, China's mainland tire companies accounted for 29 seats, of which 10 companies entered the top 30. This is rare in other industries in China, and the importance of our tires in the world tire industry is evident. Tire companies believe that the current government is trying every way to provide assistance for the development of China's real economy, and relevant departments should also adjust the composite rubber standards. If the tire companies have collapsed, what are the benefits to the natural rubber industry?
To this end, tire companies have called for the suspension of the implementation of the new standards for composite rubber. They also recommend that: first, the state should implement subsidies for rubber farmers in the event of low natural rubber prices; Partial subsidies will be given. The third is to establish an upstream and downstream liaison mechanism with Nongken to jointly develop natural rubber products and stabilize the natural rubber market.
(Note: This article is an original article of China Rubber Network. If reprinted, please indicate the source, and some references should also indicate the source.)