Demand in China to grow 8.8% per year through 2017
Demand for rubber products in China is projected to grow 8.8 percent per year to 740 billion yuan in 2017. Advances will be supported by healthy growth in manufacturing, especially in the industrial machinery and motor vehicle industries. Rapid expansion in China’s motor vehicle industry, driven by strong demand gains for both automobiles and other vehicle types such as medium and heavy trucks and buses, will contribute to growth in demand for tires and other rubber products.
Exports to remain despite some hurdles
Rubber product shipments in China are forecast to increase 8.6 percent annually through 2017 to ¥890 billion, benefiting from sizable expansions in the domestic market as well as rising export demand for Chinese rubber products, especially tires, as the quality of Chinese rubber products continues to become internationally competitive. China will continue to see a significant trade surplus in rubber products for the foreseeable future.
Exports of rubber products will grow 7.3 percent per year through 2017, driven by competitive prices and improved product quality. However, the EU’s new tire labeling regulations, which took effect in November 2012, and the continued antidumping duties imposed by the US and Brazil will restrain Chinese tire exports to some extent. Imports of rubber products are expected to grow 6.9 percent annually through 2017. Foreign suppliers will continue to benefit from growing demand in China for higher quality industrial rubber products.
Tires are key rubber product segment
Tires are the largest rubber product segment, benefiting from high motor vehicle production and a large motor vehicle park. As income levels continue to grow, greater demand for higher-priced tires will further boost product sales. Tire demand will also receive a significant boost from industrial vehicles such as construction machinery and agricultural equipment, which utilize very expensive tires.
Industrial machinery, motor vehicle markets will lead gains
The industrial machinery and motor vehicle markets have the largest impact on overall rubber product sales, as they accounted for 72 percent of total demand in 2012. Gains in these two markets are forecast to outpace the market average through 2017. Sustained plans to expand industrial machinery and motor vehicle production will continue to stimulate growth. Rubber product demand in the aerospace and other transportation equipment market is projected to grow at the most rapid rate through 2017, benefiting from strong in-creases in the production of commercial aircraft such as CRJ21 and C919, helicopters, and aircraft parts.