Tire output in China increases.

Research and Markets (www.researchandmarkets.com) of Dublin, Ireland, has issued a report on the China tire industry for 2006-2007. The rapid growth of the Chinese economy is said to have driven the automotive industry to develop dramatically, boosting the prosperity of the tire industry, according to the report.

Data from the National Bureau of Statistics reveal that the year 2005 witnessed a sustainable and steady growth in the tire industry. Tire output reached 283 million units, up 18.7% over 2004. Sales revenue also achieved more than RMB 80 billion. The output of radial tires was 142 million units, meaning that over 50% of tires produced for the whole year were radial tires. The output of full-steel radial tires was 90 million units, increasing by 31% year on year. The output of steel-belted radial tires was 111 million units, growing 70% over the year 2004. Tire export volume reached about 90 million units, up 31% over 2004. Export value achieved $3.2 billion, with a year on year increase rate of 50%.

In the first half of 2006, raw material prices rose. However, tire output continued to be increased dramatically. According to data from the China Rubber Industry Association, the total output increased by 13.9% during January through July of 2006 compared to the same period in 2005.

The growing tire output stimulated the strong demand for raw material, according to the report. For instance, in the first half of 2006, demand for carbon black increased by 13.9% compared to the first half of 2005. Rubber consumption reached 1.119 million tons, up by 20.23%. In particular, China imported an even larger number of raw rubbers, of which compounded rubber and synthetic rubber exceeded natural rubber. In the first half of 2006, China imported 720,000 tons of natural rubber, an increase of 13.2% compared to the first half of 2005. The total import value was $1.27 billion, up by 68.2%. The average import price rose 48.6% to $1,764 per ton. Moreover, in the first half of 2006, China imported 192,000 tons of compounded rubber and 672,000 tons of synthetic rubber, up by 65.2% and 29%, respectively, compared to 2005.