The Next Phase of the Tire Industry

By: Kedar Murthy

This month, I attended the Biennial Canadian Rubber Conference in Niagara Falls, Canada and the American Chemical Society (ACS) Rubber Division Meeting in Pittsburgh. It was evident during both conferences that the tire industry is facing some major challenges. Low oil and raw material prices are driving the industry to question the way it currently does business, in conjunction with increasing regulatory pressures and the influx of foreign tire companies building plants in North America.

Industry experts are expecting 2017 to be another flat year, with raw material prices predicted to move up.  Even though unit car sales and miles driven are expected to increase, tires sales will likely remain flat due to imports from China and the rest of Asia. The discussion in Pittsburgh remained cautiously optimistic, though. The U.S. government recently implemented an import duty on Chinese truck tires, which should help the retreading companies and the truck segments.

There is still uncertainty about the impact of Chinese tire companies producing in the United States in the near term. Two companies, Kumho and Hankook, have already started production, and several more plan to enter the market next year. While the increased competition may be unfavorable to U.S. tire manufacturers, international tire companies have been manufacturing tires in China for years, so the impact may not be as significant as expected.

The conference in Canada looked at how these market changes are forcing tire companies to consider adopting new materials. I spoke on a panel with Ben Galizio from Bridgestone and Jeffery Sussman from Goodyear. The discussion centered around how the tire industry can adopt the principle of the circular economy, including using new materials such as guayule; reusing tires through micronized rubber powder; and working with other tire companies through the World Business Council to solve the end-of-life tire problem.

One of the most well-received comments was about the parallels between aluminum recycling and tire recycling. “Like the aluminum and the paper industries, the tire companies need to step up and support recycling by supporting companies in the re-purposing business.” This was met with resounding applause!

It is important to note, however, the difficulty of breaking into the market for reusing tire rubber and adopting new materials in a traditionally conservative industry. Many small companies are trying, but without capital to drive scale and processes warranting ISO qualification, working with tire companies is near impossible. That’s why at Lehigh Technologies, we emphasize big company discipline and prioritize process, environment and safety to meet the highest international standards. 

There is consensus in the tire industry: business as usual is no longer enough. As we look towards 2017, the circular economy and reusing tire rubber will continue to play a pivotal role in the future of the industry. We anticipate that more key players in the market will embrace new materials, and we look forward to helping them adopt micronized rubber powder.