Key notes: 4 takeaways from Clemson Global Tire Industry Conference

HILTON HEAD ISLAND, S.C. — The talk has been all about tires this week at the Clemson University Global Tire Industry Conference in Hilton Head.

The nearly 25 presentations touched on a wide range of topics, from sustainability to economics to rethinking various supply chains within the industry. There also was a number of technical talks covering testing, modeling and dealing with battery electric vehicle weight, among others.

It was the first Clemson conference in three years because of the COVID-19 pandemic, and the final one for Jim Burns, who has been conference chair of the event since 1985.

Here are four quick takeaways:

The fallout from the Russian invasion of Ukraine certainly will have a shelf life beyond the next six months, and the full picture continues to evolve, said Bill Hyde, executive director of olefins and elastomers/chemicals IHS Markit.

"Anything said in early February with regards to costs probably aren't valid anymore," Hyde said at the Clemson Tire Conference. While much of the early talk centered on the sharp rise in crude oil talk, Europe certainly will feel the pinch in natural gas supplies, as Russia supplies 30-40 percent of the continent's needs of that energy source.

Hyde said some of the early forecasts that Brent crude oil could jump to $160 a barrel likely won't come true, with the June forecast from his firm now in the $110-$120 a barrel range, still well above the $70 price from January. The market, though, likely will tighten up before it loosens again, as it will take a while for U.S. sources to ramp up, and Saudi Arabia and the United Arab Emirates have been unwilling thus far to increase production beyond its current output.

As for synthetic rubber, once the market gets past the transition, there is enough rubber capacity in the world to offset the loss of Russian SR output.

Ryan Berry, president and CEO of TSD Logistics Inc., told the Clemson audience that the growth expected in the coming years for carbon black to support the new plants and expansion projects going on in the U.S. will exceed the ability of the rail and truck supply chain to support these future expectations.

His suggested remedy? Reinvent the raw material supply chain.

Berry said capacity can be created by establishing a hub/distribution point with inbound bulk rail and outbound bulk trucking options. Such a hub would need rail service, rail storage, interstate access, and warehousing and transloading capacity.

It also would need to be located with proximity to both carbon black and tire factories, allowing for a one to two day transit via truck.

The CEO of the Texarkana, Texas-based logistics firm came up with two potential locations for the hub. He called one the Arkansas-Louisiana-Texas hub, that would be within a 650 mile radius of 23 tire and rubber plants, along with 14 carbon black plants. The other would be Memphis, which would have 41 tire and rubber factories, and nine carbon black facilities within that same 650 mile distance.

When lobbying on "The Hill," it often makes sense not to focus on the politicians, but rather on the agency staffers and regulators who don't come and go with every election cycle.

Tracey Norberg, senior vice president and general counsel for the U.S. Tire Manufacturers Association, shared a slide showing that the unfavorable ratings of both the top Democrats and Republicans in Washington easily exceeded their favorable ratings. And that has a direct impact on trying to make progress on issues of importance to any interest group, including the USTMA.

"Sometimes things don't get done because politicians are fighting for their political life," she told the Clemson audience in Hilton Head.

Because of that, Norberg said it is important that the USTMA focus on its own "bread and butter."

"We have to tell our own story and work with who shows up," she said. That means working with those staffers who aren't going anywhere, and make sure—regardless of who is in charge—that the association gets across its message of how important the tire industry is in today's society.

Currently, the USTMA is working to support proactive legislation in areas such as infrastructure investment, scrap tire market development and climate policy. Further, Norberg said it is advocating for what she calls "smart regulations" that target tire safety, performance and innovation; tire consumer information and standards; and environmental stewardship.

Matt Kent, technical director for tire and wheel testing at Smithers, spoke at the Clemson event on applying high speed uniformity testing to the evolution of vehicle and tire development. It's been well documented that much work needs done in terms of noise, vibration and harshness with electric vehicles compared to the traditional internal combustion vehicles. EVs don't have driveline and engine vibrations to mask noise issues, so the passengers find it much more noticeable.

Well, Kent has experience of his own to see just how much more apparent that noise may be. The Smithers official has done some motorcycle racing over the years, and these riders wear ceramic knee cups for safety reasons when they lean into the turns on a race course.

Kent said during his talk that he was testing an electric racing bike for Virginia Tech University at the Beaver Run track near Pittsburgh. When he leaned into the first turn and the cup hit the track, he heard a screeching noise that actually scared him. He asked what that was. The answer was simple: "The noise was always there," Kent said. "I just never heard it because the engine had always been screaming in my ear."