By Alex Kapadia
Chinese tyres manufacturers are expected to benefit from a steep cut in duty on imported natural rubber which comes into effect on the 1st January 2010.
The announcement from the Ministry of Finance is a welcome boost to the Chinese tyres industry, which was hit by a steep rise in tariffs imposed on its tyres exported to the US earlier this year.
The Chinese government revealed that the import tax on natural rubber will be reduced by 23% to RMB 2,000 per ton, which slashes the prices of smoked sheet rubber to RMB 1,600 per ton from RMB 2,600 per ton.
China, the world’s largest tyre manufacturer, has a huge demand for natural rubber because of the booming automobile industry, and 60% of the natural rubber in China is imported from overseas.
Therefore, the duty cut will help lower the costs for Chinese manufacturers, which will go a long way to balancing out the US governments decision to impose a special 35% import duty on light tyres made in China back in September.
Industry insiders said the duty cut may result in more rubber imports next year.