LIVE: Poland is pushing for a ban on Russian synthetic rubber to be part of new EU sanctions, which are set to be unveiled on the one-year anniversary of the start of Russia’s military attacks on Ukraine on February 24.
And according to the Balkan News Network, which specializes in Eastern European and Eurasian affairs, this proposal faces opposition from Italy, Germany, Hungary, Romania and the Czech Republic, which have long relied on Russian rubber to produce their car tires, according to the Middle East News Agency, today, Tuesday.
The network’s report indicated that tire manufacturers in those countries, which include (Pirelli), (Michelin), (Continental) and (Nokian), may be paralyzed due to the potential ban, which will increase costs and make their products less competitive compared to tires. Cars manufactured in the United States, Japan and China, with Russia accounting for more than 50 percent of the European Union’s synthetic rubber imports in 2021 and about 30 percent of it over the past year, according to estimates.
Reports indicate that the Polish Synthos Group, owned by billionaire Michel Solow, has exerted some pressure for the Russian rubber to be banned, as the group plans to re-produce butadiene rubber in its facilities in Schkopo, Germany, next March, as part of its ambition to partially replace the Russian product, similar to plans Replacing North American LNG with Russian natural gas, which has led to higher prices in Europe and profits for the United States.
However, Synthos’ success in solving the problem by entering the scene is not guaranteed, as the Polish company produces only certain grades of rubber, while the manufacture of tires includes many more grades, many of which are produced mainly in Russia so that it will be difficult to replace them.
This is not the first attempt to replace Russian rubber, as some European tire manufacturers have already decided in 2022 to boycott Russian rubber for political reasons, and these producers were able to replace two-thirds of the synthetic rubber previously purchased from Russia, except that they had to pay twice the price of Russian rubber for the products. From the US or China, they also had to waste additional time and resources reconfiguring manufacturing equipment, coupled with energy inflation, which increased production costs and raised the price of their tyres.
During the second half of 2022, after the introduction of these self-imposed restrictions, sales of replacement consumer tires fell by 10.1 percent, while sales of alternative truck and bus tires fell by 8.2 percent, according to the European Tire and Rubber Manufacturers Association, which said the conditions in Ukraine and the subsequent increase In energy prices and the rising cost of living, will undoubtedly affect the sales of alternative tires in the industry in 2022.
The potential ban is unlikely to have a significant impact on Russia, as the experience of past sanctions shows that Moscow’s producers have succeeded in redirecting exports to Asia without being hit hard by EU restrictions. It is even more paradoxical that the ban on Russian rubber would be a severe blow to the European tire manufacturers themselves, as it threatens to raise their costs, reduce tire production in Europe, and even lead to job cuts.
