China's compound rubber imports exceeded 1.0 million metric tons for the first time in 2009 due to the zero tariff on supplies from some major exporters.
Imports are provisionally estimated at 1.02 million metric tons in 2009, almost double from the previous year, according to government data, the Association of Natural Rubber Producing Countries said in its latest report.
China imported 557,000 tons of compound rubber in 2008.
Under a free trade agreement with the Association of South East Asian Countries, China is phasing out tariffs on compound rubber imports.
For major rubber growers such as Indonesia, Thailand and Malaysia, the zero tariff was implemented in 2009 while it was 5% for other Asean countries.
Many exporters blend natural rubber with a small amount of synthetic grade to qualify for China's lower tariffs.
While China's annual natural rubber imports have been rangebound between 1.4 million and 1.6 million tons for the last five years, compound rubber imports have almost doubled in just one year.
The tariff on natural rubber imports in 2009 was 20%, or CNY2,600/ton, whichever was lower depending on the imported price.
China has cut the import duty on natural rubber by 23% to CNY2,000/ton for 2010. The duty on smoked sheet rubber was cut even more sharply, by 38% to CNY1,600/ton. This makes imports cheaper for those rubber product manufacturers which buy natural rubber without any synthetic blend.
However, strong demand for tires amid rising production and sales of new cars is mainly fueling imports of compound rubber, which is duty-free.
China is world's largest consumer of rubber and bulk of it is used to make tires.
China's tire output rose 36% on year in November to 60.19 million units, fueled by strong passenger vehicle sales that almost doubled to a record 1.04 million units.
(Source: irco.biz)
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