Page 18 - CTB N15 - 2016-03

RETREADING
Retreading Faces the Challenge of Chinese Tyres
There is little doubt that the retreading industry across Europe has had a difficult time of things over the course of the last two years. Some markets have been affected more than others. Major European markets like Germany and Italy appear to have suffered more than the UK – the smaller pre-cured retreaders are finding going more difficult than the larger mould cure operators, who are able to spread their offering beyond mere retreading to new tyres, fleet management services etc. Nonetheless, the story is the same. The retread market, in
unable to defend European SME Industr y against cheap imports from China. At the same time BIPAVER also wrote individual letters to Jean-Claude Juncker, President of the European Commission and Dr FCGM Timmermanns, Vice-Chairman of the European Commission, urging them to reconsider a recent decision by GD Handel not to initiate an anti-dumping action against the Chinese. The failure to introduce such an action, says the letter, threatens 10,000 SME jobs across Europe and stands to eliminate, at least in the medium term, a whole
they are not able to defend their own SME industries.”
In justifying its position, BIPAVER pointed out in its press release that “the Chinese tyre industry has been dumping truck tyres in the European market. Today the prices of most of their products sold in the EU- 28 have fallen below the manufacturing costs of retreaded truck tyres. Market conditions have worsened quickly over the last year mainly due to an increase of anti-dumping regulations in neighbouring continents.” This, it said, has resulted in an increase in cheap
imports from 1 million to 5 million tyres over the course of the past five years, during which time truck retreads have fallen from 6 million to 4 million units.
Not that BIPAVER’s efforts are likely to cut much ice either in Brussels, or in the UK now that this countr y has decided to leave the EU. Back in April, I wrote an article for our sister magazine Retreading Business in which I commented on the wrangling over the future of the UK steel industry and, in
particular, the potential closure of the Tata Steel owned Port Talbot Steelworks in South Wales, which was said to be losing £1 million per day. The main reason given for the
uncompetitiveness of the Port Talbot plant was the dumping of cheap steel from China into the European market. In an ultra- free market approach, the EU had, at the time, managed to impose penalties of only 13% on Chinese cold rolled steel compared to a whopping 267% by the US government in Washington.
However, there were many who suggested that there was more at stake than just the principle of free trade.
“We are rolling out the red carpet for Beijing,” said Port Talbot MP Stephen Kinnock, in a newspaper article, suggesting that Britain was pushing for China to get market economy status at the World Trade Organisation despite the fact that the vast majority of its steel industry was state-owned. He also described Britain as a “ringleader” in blocking European commission attempts to improve anti-dumping policies.
In another article a Brussels official was quoted as saying; "The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade."
In a further article the same sentiment was echoed, suggesting the British government was so reliant on Chinese funding for projects such as Hinkley Point, that it
did not want to annoy the
CommercialTyre
Management
and Fleet Business
some parts of Europe, fell by as much as 30% last year. The culprit? Chinese tyres sold at increasingly competitive prices, many of which the retreading industry claims are being sold below cost price, subsidised by a Chinese government trying to fight a tide of overcapacity in their own market.
Not that the European retreading industry has stood still. BIPAVER, the Federation of European Retreading Associations, has been actively lobbying the EU to introduce anti-dumping measures against the Chinese, such as those being introduced by other countries around the world (i.e. Russia, Brazil and the USA).
BIPAVER’s efforts, however, have fallen on deaf ears, to the point where the Federation was forced in June to issue a press statement accusing the European Commission of being
branch of the tyre industr y in Europe.
“After more than a year asking the Directorate-General Trade to consider our case and presenting several solutions, both technical and
legislative, it has become clear that the European Commission is not able to defend our industr y due to the lack of legislation for this specific situation within the retread
industr y,” says the strongly worded press release. “At a time when the EU is discussing opening even further the EU market to imports from diverse exporting countries and when its citizens are questioning the European project, the retreading industr y cannot understand the added value of a European trade policy if
18 Commercial Tyre Business