The sluggish domestic stock market in 2012 was an extremely difficult year for most listed companies. However, the profits of several large tire companies have risen against the market.

Among domestic companies, listed companies such as Shuangqin Shares, Saiwan Stock, and S.Getter, had a net profit increase of 61.1%, 43.3%, and 260.8% year-on-year in the first three quarters of the year. Among the multinational tire giants, the Michelin Group’s net profit increased by US$304 million in the first half of the year, and its profit margin increased from 9.6% to 12.3%, but its sales volume declined; Pirelli ’s net profit reached US$273 million in the first half, a year-on-year increase of 39 %, but its total sales for the same period decreased by 7.5% year-on-year; Cooper Tire's third-quarter net profit surged 335%.

This year's natural rubber prices have plummeted. Does the company's considerable profits come mainly from the reduction of raw material costs?

The sudden drop in rubber prices leaves room for profit

The industry generally believes that this year's profit growth is due to the decline in rubber prices, which is directly related to the reduction in the cost of rubber. Dr. Cao Kechang, vice president of Asia-Pacific Division of Cooper Tire & Rubber Co., Ltd., accepted the statement when he accepted an exclusive interview with Tire World.

Data show that natural rubber since the highest point in 2011, 40,000 yuan / ton, fell to the current 23,600 yuan / ton, the decline rate of 40%, styrene butadiene rubber and butadiene rubber prices since last year's highest point so far, the decline rate is also 9,000 yuan / About tons.

According to Liu Peixin, analyst of Baichuan Information Rubber Industry, the price of rubber has fallen so sharply that the adjustment of raw material prices is faster than the price adjustment of tires, leaving time and space for corporate profits. Therefore, it is not surprising that the profits of tire companies have increased substantially.

In addition, he also stated that because the rubber market will be stable next year, it is unlikely that the tire companies’ mode of profit will reappear.

Multinational companies rely on market segments to make profits

“Because of the rapid and significant changes in rubber prices in the past two years, it has had a significant impact on corporate profits.” An insider of a domestic tire company said that there are many kinds of corporate profitability, rubber prices will not affect long-term tire companies The most important factor for profitability.

Liu Peixin’s explanation is that it is generally believed that tire companies can make profits through two models: one is to “win” by volume and increase corporate profits by increasing the number of production, which is a common mode of growth for domestic companies; the other is “ "Quality" to win, according to market demand for the production of suitable products, improve the added value of the product.

Insiders pointed out that the huge increase in profitability of tire giants actually benefits more from their excellent market segments. This year, Michelin mainly compensates for the losses caused by the decline in French car sales through its profits in emerging economies; Pirelli, on the other hand, relies on high-end premium tires for development.

Most people in the industry believe that regardless of the model used by tire companies to increase profits, rubber prices will not be the dominant factor in long-term corporate profits.

Automatic Shape Moulding Machine With Vacuum

Eps Shape Molding Machine,Insulated Eps Foam moulding machine,Automatic Eps Foam Machine,Fish Box Cooler Foam Machine

Zhejiang Huasheng Machinery Equipment Co.,Ltd , https://www.hsfoammachine.com