Rubber Imports by China May Climb by 10% on Carmaker Demand, Citic Says

China, the world’s largest natural rubber user, may boost imports 10 percent this year after “robust demand” from tire makers depleted inventories to the lowest level in more than seven years, an analyst said.

Imports may climb to about 1.87 million metric tons from 1.7 million in 2009, likely supporting prices as shipments from major producers slow, Liu Bin, an analyst at Citic Securities Futures Co., said by phone from Shenzhen today. Inbound shipments by China declined 1 percent to 980,000 tons in the first seven months of this year, according to customs data compiled by Bloomberg.

Stockpiles tracked by the Shanghai Futures Exchange declined to 14,771 metric tons on June 24, the lowest since Feb. 2003 and were at 24,701 tons last week. Combined inventory monitored by the exchange, at ports and in industrial warehouses may have dropped to the lowest level in three years, compared with the same time in previous years, Liu said.

“Robust demand from tire makers this year caught many industry players off-guard,” Liu said. “Many had expected to see auto sales and tire consumption growth to slow, especially after the U.S. decided to levy Chinese tire imports.”

Natural rubber prices climbed to 26,200 yuan ($3,850) a ton today on the Shanghai exchange, the highest level since July 2008. Prices are likely to be supported as shipments from producing countries in Southeast Asia slow because of disruptions to output caused by storms and wet weather, Liu said.

China’s tire exports jumped 30 percent in the first six months from a year earlier to 86.68 million units as demand from developing countries outweighed lost sales in the U.S., Liu said. The U.S. in September levied a 35 percent duty on $1.8 billion of China-made tires.

“Coupled with a still-strong domestic auto market, you have a very bullish demand picture,” Liu said. China’s retail passenger-car sales in August jumped 59 percent from a year earlier to 977,330 units, the China Automotive Technology & Research Center said yesterday.

The nation’s total vehicle sales in August increased 56 percent compared with the previous year to 1.22 million units, according to the center.

(bloomberg.com)