By Patrick Raleigh, Crain News Service
BRUSSELS (Oct. 30, 2014) — The shale gas revolution is a significant factor behind a recent spate of investments by overseas tire makers in the US, according to Patrick Ellis, associate consultant at Akron-based Smithers Rapra.
Many U.S.-based industries are becoming increasingly advantaged through the availability of shale gas ethane at a fraction of the cost of conventional petroleum-based feedstock, Mr. Ellis said. Among other products, this ethane can be converted into synthetic rubber monomers including butadiene and isoprene.
Speaking on the first day of the Future Tire Conference, held Oct. 28-29 in Brussels, Mr. Ellis said the surge in the shale gas business is in turn reducing the cost of materials, such as polybutadiene, styrene-butadiene and polyisoprene rubber.
The conference is being sponsored by Crain Communications Inc., parent of Tire Business.
“In terms of the tire industry, we are talking between $900 and $1,100 a ton vs. $300 a ton [for feedstock]. So the tire industry in the U.S. is going to be very happy in a few years' time,” Mr. Ellis said.
There have recently been tire plant investments by companies in the U.S. totaling $4 billion, he continued, noting, “they are not Americans: it's Michelin, Conti, Hankook and Bridgestone, who are investing an enormous amount of money.
“I don't think it is just because they want to be at the door step of the [U.S. vehicle] producers. I believe it goes further than that.”
This report appeared on the website of European Rubber Journal, a UK-based sister publication of Tire Business.