Michelin warns rising rubber prices will impact profits.

Michelin, the world's second-largest tire manufacturer, which recently reported slumping profits for 2003, has warned that higher rubber prices, due to strong demand, could weigh on profits again in the year to come. Chairman Edouard Michelin, speaking at a press conference, said that following a 21% rise in 2003 rubber prices, which was caused predominantly by an 87% surge in demand from China, prices could rise by another 10-15% in 2004. However, it was noted that while raw materials will remain expensive, the international rubber price is still 17% below the peak that was reached in 1995.