European Union's labeling law has strong pressure on China's tire exports to face a second crisis

The punctual meeting held in the morning continued until the evening. At first glance, the venue of "Langsheng Rubber Day" was still a dark mass of people. Such scenes were rare. At the end of the year, many companies who came forward to organize meetings like to walk through the court to cope, but many people just don't want to leave this day. Speakers speaking in fluent English or German, those guests who have travelled far from Europe have revealed a strong signal, intentionally or unintentionally: In some important markets for Chinese tire exports, the tire labeling law is about to be enforced.

The overwhelming majority of domestic consumers may have unheard of this EU bill. China is the world’s largest tire-producing country. Its production accounts for about one-third of the world’s total production, and its production capacity is still growing. A survey commissioned by LANXESS by the First Financial and Economic Research Institute shows that with the shift of the world's tire manufacturing center to the Asian market led by China, it is expected that the Chinese tire manufacturing industry will maintain a rapid growth rate in the next few years.

Where are the growing tires going? Two years ago, the Chinese tires exported to North America faced a blow. The Sino-US tire protection case is still a negative case. In this market, which is called globalization, relying on a single market force does not solve all problems.

New EU law emerges

According to the European Commission's recently issued tire labeling regulations - EC1222/2009: Since November 1, 2012, tires for passenger cars, light truck tires, truck tires and buses sold in the EU must be labeled to indicate the fuel efficiency of the tires. , rolling noise and wet grip rating.

The labelling method covers all vehicle tires. Specifically, this regulation standardizes the three major properties of tires: fuel economy (ie, tire rolling resistance requirements), wet road grip level, and road noise level, which are represented by black labels according to different levels. The European Commission claimed that the implementation of the new tire labeling method could achieve a 20% reduction in European energy consumption by 2020.

This is a stricter restriction after the European Union's REACH regulation restricts the content of polycyclic aromatic hydrocarbons used in tires. In the pursuit of environmental protection and energy conservation, the tire labeling method puts high demands on the manufacturing process of tires, especially high-performance rubber production, and this is the weakness of many domestic tire manufacturers. The EU has become an important market for exporting tires in China. Take Jiangsu, an important base for domestic tire production, as an example. Last year, Jiangsu's exports to the EU accounted for 26.9% of exports, ranking first in the country, and the EU’s series of regulations for the tire industry. The implementation will have a great impact on the export of EU tires.

In recent years, the concept of green tires has become familiar to consumers. However, real green tires are not a concept that confuses consumers. According to the LANXESS Group, which has only begun to transform its research and development of environmentally-friendly rubber products in recent years, “green tires” are the fastest-growing segments in the tire industry due to their higher fuel efficiency, safety performance, and durability performance than ordinary tires. The market has a global average annual growth rate of about 10%. A recent study by the Munich University of Science and Technology shows that by 2020, the market share of green tires in China will likely increase to 50%.

The new tire labeling method opens up a huge market segment, but products lacking new technologies and processes do not participate in sharing one's share. It is understood that LANXESS Group is a major supplier of Nd-PBR and SSBR, both of which are key components in the production of green tires. Nd-PBR (Nd-PBR) is mainly used for the production of treads and sidewalls of green tires and has lower rolling resistance than many Other tire rubbers. In addition, it also reduces tire wear and therefore plays an important role in improving vehicle safety and extending tire life. Solution-polymerized styrene-butadiene rubber (SSBR) is mainly used as tread rubber for green tires to reduce rolling resistance while improving grip performance on wet surfaces. Green tires made of high-performance rubber can reduce automobile fuel consumption by 5%-7%, thereby reducing carbon dioxide emissions.

The special security case is not broken

The impact of technical barriers on the Chinese tire industry is currently difficult to assess. Will its impact exceed the impact of the US tire special security case?

On April 20, 2009, the American Iron and Steel Workers Union applied to the US International Trade Commission for the purpose of initiating special safeguard investigations on tires of passenger cars produced in China on the ground that China's tire exports to the United States disrupted the US market. Subsequently, the U.S. Trade Commission proposed to impose high special ad valorem tariffs on China's passenger cars and light truck tires for three consecutive years on the basis of current import tariffs (3.4%-4.0%). After all the legal procedures have been completed, the United States Tire Special Security Case eventually ended in the Chinese losing case.

After the U.S. government announced the adoption of special safeguard measures to impose punitive tariffs on Chinese tire products exported to the United States, the China Rubber Industry, the China Minmetals Chemical Products Import and Export Chamber of Commerce, the China Rubber Industry Association Tire Subcommittee, and the China Minmetals Chemicals Import & Export Corporation Chamber of Commerce tires The club and all the tire-related companies in China even issued a protest letter to President Obama, which ultimately did not help. The U.S. safeguard measures two years ago caused 12% of the Chinese tire industry to have excess capacity, dozens of tire companies closed down, and hundreds of thousands of people were affected.

In the final analysis, the United States tire protection case is a political barrier erected against China. If we say that we should deal with similar political barriers, domestic business associations can still protest, file lawsuits and fight lawsuits. So how should we deal with such technical barriers as the tire labeling law?

The proposal given by the domestic inspection and inspection department is that tire enterprises exporting to the European Union should attach great importance to and seriously study the relevant new regulations of EU tyres, actively formulate relevant countermeasures, improve the quality control system and related project testing platforms, and from the production process In order to improve the technology, actively improve the environmental performance of products; at the same time accelerate the development of foreign emerging markets, especially countries such as ASEAN, India, and China have signed a free trade agreement, to implement a "diversification" strategy to reduce the excessive concentration of tire export market risk; The inspection and quarantine authorities should strengthen the tracking of REACH regulations and tire labeling regulations, give full play to information and technological advantages, and do a good job in the technical service to the tire companies in Europe; at the same time, the relevant standards-setting departments should speed up the follow-up of EU tire labels. The implementation of regulations and REACH regulations will establish and implement new regulations in line with international regulations in the field of tire technology to improve the safety and international competitiveness of China's automotive tires.

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