In the past few days, the situation in Russia and Ukraine is still very serious. Western countries have announced economic sanctions against Russia, which has had a profound impact on the global economy, finance and industrial chain.
The tire industry we are in has not been spared this big change. Although there is no clear data to show how much direct losses the Russian-Ukrainian conflict has brought to the tire industry, the impact of this war on tires must be greater than yours. Imagine a lot bigger.
Several tire companies cut their 2022 financial expectations
First of all, the most direct impact of the outbreak of the Russian-Ukrainian war is the Russian tire factory. At present, it is known that the Russian factory with many tire companies has been affected.
1. Tire companies lower their financial targets
After the outbreak of the Russian-Ukrainian conflict, Nokian Tyres stated that there are currently great uncertainties in Russian finance, the functions of the payment system, and the Russian ruble exchange rate. Therefore, the board of directors decided to withdraw the company's financial targets released on February 8 this year.
It is understood that in 2021, the net sales of Nokia's Russia-Asia combined business unit will total 336 million euros. In its first-quarter 2021 financial report, the company said 82 percent of passenger tires were manufactured in Russia, down from 85 percent in the first quarter of 2020.
In addition, Pirelli also said that the two factories in Russia account for about 3-4% of the company's total turnover, and the output accounts for 10%. After the conflict between Russia and Ukraine, it has lowered its 2022 operating profit margin forecast. The adjusted operating profit margin will be in Between 16% and 16.5%, compared to about 16% to 17% previously.
2. There are many tire factories in Russia
Nokian Tyres, Russia's largest exporter of consumer tires, said a few days ago that it was transferring the production of some "key product lines" from its Russian tire plant to plants in Finland and the United States.
Crude oil supply is challenged,
Tire raw material prices
Synthetic rubber is one of the main raw materials for tires, and Russia is an important global supplier of synthetic rubber and a major oil producer. The outbreak of the Russian-Ukrainian war also brought uncertainty to the supply of these two raw materials.
1. Russia is one of the main importers of synthetic rubber in my country
The data shows that Russia is the third largest source of synthetic rubber imports to China. In 2021, China will import about 140,000 tons of synthetic rubber from Russia, down about 40% from about 250,000 tons in 2020, accounting for about 250,000 tons of synthetic rubber in China. of more than 12%.
2. Oil prices have doubled, and lubricant companies have raised prices
Russia is a major oil country. After the conflict, the energy and commodity markets were in chaos, and oil prices were soaring. As of March 4, Brent crude futures rose above $100 a barrel to $111.35 a barrel. Analysts said in early February that oil prices could also reach $120 a barrel.
In addition, a lot of synthetic rubber is also extracted from crude oil. The increase in the price of crude oil will inevitably affect the price of synthetic rubber. Synthetic rubber is the main raw material of tires.