Excerpt from the piece I wrote for Expedite NOW regarding the natural rubber shortage:
"What's going on worldwide is a shortage of natural rubber that is used in making truck tires, and increasing demand for tires and rubber products of all kinds. With the supply of natural rubber decreasing and tire demand increasing, truck tire prices are skyrocketing and the tires themselves are getting harder to find. These conditions are expected to persist for years."
Things change quickly. In the news today is a Bloomberg piece about a surplus in natural rubber and declining prices.
Excerpt:
"Rubber plantations from Indonesia to Ivory Coast will tap a global crop this year that will create the biggest glut since at least 2004, cutting costs for Bridgestone Corp., Michelin & Cie. and other tiremakers. The market will switch to a 413,000-metric-ton surplus, from an 87,000-ton shortage in 2011 that helped drive rubber to a record in February, Goldman Sachs Group Inc. estimates.
"Prices fell since then on prospects for more supply and slower growth in China, the largest consumer."
While news of declining rubber prices is encouraging on its face (from a trucker's point of view, especially when he or she is standing in a tire store), it's hard to say at this point how this will play out in the U.S. tire market. As you can see from both articles, many factors affect rubber prices.
With rubber prices at sky high levels last year, I wonder if rubber tree plantation owners may have given into the temptation to over tap their trees, possibly setting up a shortage situation over the next crop cycles.
Rubber trees have a life cycle. Growers manage output by uprooting old trees and planting new (which take seven years to become productive). In orderly markets this is an orderly process but in markets where prices whipsaw the process gets disrupted by crazy price action.
So I took him to his tire racks and educated him on the tires. TA will have them you might just have to weed through the G rated tires and find the ones you need yourself and show them and make sure those are the tires installed before paying.......
