Bridgestone tyre recall seen buoying rubber price<\/p>\n
BANGKOK (Reuters): The world's rubber price will get a boost
\nif Bridgestone's recall of 6.5 million tires forces it to enter
\nthe market to buy rubber for replacements, trade sources in
\nThailand said on Thursday.<\/p>\n
\"There will certainly be higher demand in the world rubber
\nmarket if Bridgestone needs to buy more rubber for its tyre
\nreplacements,\" said a trader at a major trading firm.<\/p>\n
Bridgestone's unit Firestone said on Wednesday it would recall
\nat least 6.5 million tires following a U.S. safety authority
\ninvestigation.<\/p>\n
\"This of course means the world rubber price would go up, but
\ngradually....not sharply and excitedly,\" said an official at one
\nof Thailand's largest exporting firms.<\/p>\n
Bridgestone is a major buyer of rubber from Thailand,
\nIndonesia and Malaysia. The three countries account for almost 80
\npercent of the world's rubber production.<\/p>\n
Most traders said Bridgestone would have a good purchasing
\nstrategy that would not allow the world rubber price to rise too
\nquickly.<\/p>\n
\"They will definitely not purchase the whole lot at one go,
\nbut will do it bit by bit,\" said a trader based in Hat Yai town.<\/p>\n
Also, Bridgestone had already built up some stocks which they
\ncould use, traders said.<\/p>\n
\"As a result, they would not be in a hurry to come into the
\nmarket to buy additional quantities, even if it is necessary to
\ndo so,\" said a Thai exporter who is a supplier of Bridgestone.<\/p>\n
For its tyre manufacturing, Bridgestone buys Thai RSS quality
\nas well as SIR grade from Indonesia, traders said.<\/p>\n
Bridgestone per annum consumes around 200,000 tons of RSS
\ngrade from Thailand, they added.<\/p>\n
Most traders said it was difficult to precisely tell how much
\nnatural rubber was used in Firestone's Radial ATX, ATX II and
\nWilderness AT tires, which are being recalled.<\/p>\n
But they estimated that Bridgestone would need to buy up to
\n20,000-30,000 tons of natural rubber.<\/p>\n
On Thursday, the synthetic rubber price was quoted at around
\n$800 per ton on a FOB basis for nearby shipment, while Thai RSS3
\nwas quoted on Thursday at $690 per ton, traders said.<\/p>\n
Officials at Bridgestone contacted by Reuters declined to
\nreveal the component details of the tires.<\/p>\n
\"Generally, tyre makers use a ratio of 30:70 between natural
\nrubber and synthetic rubber to produce one tyre,\" said an
\nofficial at Thai Rubber Research Institution.<\/p>\n
Used tires can be recycled, but not for re-use in cars,
\nmanufacturers said.<\/p>\n
\"The reclaimed tires can only be used....as a mattress for
\nexample, but definitely can not be used for a running car again,\"
\na tyre expert at Bridgestone told Reuters.<\/p>\n
Bridgestone runs two plants in Thailand, in Rangsit on
\nBangkok's outskirts, and in Saraburi province.<\/p>",
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