Rubber demand in China, the world’s biggest user, is set to expand 7.2 percent this year, topping last year’s pace, as the government focuses on bolstering the world’s second-largest economy, an industry group said.
Consumption will grow to 7.4 million metric tons from 6.9 million tons a year earlier and 6.45 million tons in 2010, said Mary Xu, deputy secretary general of the China Rubber Industry Association, at the World Rubber Summit in Singapore.
Of the total, 4 million tons will be the synthetic variety and 3.4 million tons natural rubber, she said.
Rubber futures have plunged 51 percent from a record in February 2011 as the economy slowed and Europe’s debt crisis escalated.
The government is paying “more attention on the development of the auto industry,” which will help rubber, Xu said.
Exports of passenger car tires gained 5.7 percent to 338,000 tons in the three months to March, while truck tire shipments surged 15 percent to 504,000 tons, Xu said. Tire output could rise 5.9 percent to 483 million units this year.
Tire demand in China is growing at a slower pace than last year as economic expansion is decelerating, said Makio Ohashi, vice president of Bridgestone Corp., last month.
Growth in tire sales for trucks and buses, or half the country’s demand, could slow to near the rate of gross domestic product at 7.5 percent to 8 percent annually from last year’s 11 percent. Passenger car tire sales are also slowing from last year’s 16 percent expansion, he said.
Rubber for delivery in October lost as much as 3.9 percent to $3,259 a ton, the lowest level for the most active contract since Jan. 5, on the Tokyo Commodity Exchange. Futures have dropped 16 percent this month.
The Chinese economy will expand 7.9 percent this quarter from a year earlier, according to a Bloomberg News survey. That would be the sixth quarterly deceleration after an 8.1 percent expansion in the first three months, the slowest in almost three years. The country’s total vehicle sales declined 1.3 percent in the January-to-April period, the worst performance since 1998.
China’s imports of natural rubber, including the compound variety, are estimated to increase 3.2 percent to 2.94 million tons this year, a rubber trade group said in April.
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