According to the latest customs data, Taizhou's rubber product exports reached $148 million from January to November last year, marking a remarkable 99.6% year-on-year increase. Despite this impressive growth, many rubber companies are facing shrinking profit margins, raising concerns about sustainability in the sector.
Industry experts point out that the primary issue lies in China’s heavy reliance on imported natural rubber due to limited domestic resources. According to the Ministry of Agriculture's projections, China’s total natural rubber output is expected to be only 750,000 tons by 2010, with a self-sufficiency rate below one-third. This dependency on imports makes the industry vulnerable to supply disruptions and price volatility.
Furthermore, natural rubber prices are highly volatile, influenced by global market trends, geopolitical factors, and weather conditions. These fluctuations are difficult to predict, adding uncertainty for manufacturers. Additionally, there is a significant time lag between importing raw materials and exporting finished products, which increases operational risks.
The cost of petroleum-based by-products—essential components in rubber production—has also surged, putting further pressure on production costs. At the same time, rising labor expenses have added to the financial burden on companies.
Another challenge is the ongoing appreciation of the Chinese yuan, which has weakened the price competitiveness of Chinese rubber products in international markets.
To address these challenges, customs authorities recommend that local rubber companies increase their use of synthetic rubber, restructure their product lines, and improve their ability to manage raw material price fluctuations and currency risks.
It is worth noting that in the tire manufacturing industry, which consumes the most rubber, the U.S. uses 54.4% synthetic rubber, while France uses 50.7%. In contrast, China only utilizes around 40%. This indicates a significant opportunity for growth in the application of synthetic rubber within China’s rubber industry. By adopting more synthetic alternatives, companies can reduce their exposure to natural rubber volatility and enhance long-term stability.
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