WASHINGTON — Volatility in raw-materials prices for tires and rubber goods has moderated since last year, but is far from gone, according to manufacturers and industry analysts.
Tire manufacturers generally reported modest increases in raw material expenditures for 2017, but added that the issue of raw-materials prices always bears watching.
Cooper Tire & Rubber Co., for example, reported an increase of just under 2 percent in its raw-materials index during the fourth quarter, according to comments made by Chief Financial Officer Ginger Jones during the company's fourth quarter/full year 2017 conference call.
"On a year-over-year basis, this index increased by 4.1 percent from the fourth quarter of 2016," she said. "As we look forward, we anticipate modest sequential increases in raw material costs in each quarter of 2018, but we remain cautious as this is hard to predict."
Goodyear said it expected its raw-material costs to be roughly flat during the full year of 2018, excluding raw-material cost-saving measures.
"We expect a benefit of approximately $25 million from price and product mix net of raw material costs," the company said in its 2017 annual report.
"Natural and synthetic rubber prices historically have experienced significant volatility, and this estimate could change significantly based on fluctuations in the cost of these and other key raw materials," it said.
"We are continuing to focus on price and product mix, to substitute lower cost materials where possible, to work to identify additional substitution opportunities, to reduce the amount of material required in each tire, and to pursue alternative raw materials," Goodyear said.
Price fluctuations in raw materials are not uniform and tend to be bullish, according to Continental Tire the Americas L.L.C.