Up Next, a Possible Tire Shortage

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  • It’s important to state right up front that there’s no rubber or tire shortage in the United States just yet.
  • However, for the future-minded, all the pieces are in place for one to hit the auto industry in the near future.
  • For now, tire companies including Continental, Goodyear, and Bridgestone all say they have enough supply and production is rolling along.

    If you have enough to worry about, then don’t spare a thought for all the rubber tires needed in the auto industry. On the seemingly never-ending list of things that are causing headaches for automobile production plants—COVID precautions; a semiconductor chip shortage; even too few tanker-truck drivers, which could mean a gasoline shortage this summer—we can now add tires. It’s not a full-blown problem just yet, but tire manufacturers are keeping an eye on the situation.

    Bloomberg has reported that the supply of natural rubber, which comes from rubber trees mostly grown in Southeast Asia, is about to get harder to find. There are a number of reasons, but the main one is that supply was high recently and, because of COVID-19, rubber producers were not able to plant new rubber trees as they otherwise would have. Since these trees take seven years to mature and leaf disease and flooding have affected the trees that offer the current rubber supply, the supply is dropping. Add to that higher demand from China, which is the largest consumer of natural rubber in the world and is bouncing back from the pandemic before other major industrial countries, and a lack of shipping containers, and you have a situation where the forecasters can see trouble on the horizon. According to Bloomberg, rubber prices hit a four-year high in February.

    News reports suggest that domestic tire manufacturing is running as scheduled with a rubber supply that remains solid, for now. Continental told the South Carolina–based Post and Courier that it is not seeing a “widespread shortage” at the moment. “There are natural ebbs and flows with this commodity, but short-term no major shortages,” a spokesperson said.

    Goodyear gave CNBC a similar statement, saying: “We are not currently experiencing supply limitations on natural rubber. While we experienced tight supply late last year during the industry ramp up, we took proactive measures that ensured Goodyear’s rubber supply met our factory needs.”

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    And Bridgestone Americas president and CEO Paolo Ferrari told CNBC that Bridgestone has also not yet been affected by the shortage nor had to stop any production. He did say his team is keeping an eye on the supply chain and flagging certain items with a red/yellow/green coding system. Commercial tire demand remained high through the pandemic thus far, he said, but the need for passenger vehicle tires did, obviously, drop some. “2020 was a reasonable year, all things considered,” he said.

    As for 2021, a source told Bloomberg that “[The rubber supply is] definitely tightening up. It’s nowhere near the level of the chip shortage from our perspective so far, but it’s definitely brewing.”

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