Increased demand coupled with climate change and supply chain disruptions has created concerns in the rubber and tire industry.
Rubber demand is projected to expand nearly 1.1% annually to 2023 in the United States, driven by rising output of rubber products, according to Rubber: United States, a report recently released by Freedonia Focus Reports.
Victor Lynn, manager of Kost Tire & Auto Service on North Ninth Avenue in Scranton, noted the store has had some difficulties procuring tires during the last six months.
“There is definitely disruptions of tires and the rubber industry due to recent events with COVID,” Lynn said. “We even lost a container ship coming from overseas. People weren’t employed at the time. It pretty much shut down most of the country.”
Kost Tire has locations in Lackawanna, Luzerne, Pike, Susquehanna, Wayne and Wyoming counties.
Katrina Cornish, Ph.D., a professor at Ohio State University and a global expert on alternate rubber and latex production, processing and products, said the problem could become more prevalent in the near future.
She noted some of the major tire manufacturers — like Bridgestone and Goodyear — claim they’re not having much trouble at the moment getting rubber for their supplies, but the latex industry is a very different situation.
“Latex is how everything is tapped and that becomes the solid rubber used in tires,” Cornish said. “In 2019, we had 14 million tons of rubber in the world and those in the industry thought they were going to be making more, but due to leaf blights, extreme weather events and COVID labor shortages, we actually lost 10% of the global natural rubber in 2020 which is huge.”
Cornish said the two leaf blights spread to more than a million acres of rubber trees in seven counties in Southeast Asia in the last half of 2019 and the pandemic further complicated the problem.
“COVID doubled the demand for gloves from 300 billion to 600 billion,” she said.
Cornish anticipates global demand for rubber is going to double over the next 20 years as Asian and especially African countries continue to develop and require more cars and tires.
“The rubber market is still increasing exponentially,” she said. “Instead of going up a couple million tons, it went down 1.4 tons and demand increased a million tons because of COVID. Even if the tire companies are not hurting now, if this keeps up they are going to be hurting a lot soon. It will be very interesting to see what happens with the 2021 market figures.”
The U.S. Tire Manufacturers Association has 12 member companies that operate 56 tire-related manufacturing facilities in 17 states and generate over $27 billion in annual sales. Tire manufacturing contributes to more than a quarter million jobs in the country, totaling almost $20 billion in wages.
Leo Kelleher, owner of Kelleher Tire in Scranton, noted costs have been on the rise. For instance, tires that cost $80 six weeks ago are now selling for $97, he said.
“Tire prices have gotten ridiculous and everybody is blaming it on everything else,” Kelleher said. “They’re blaming it on the cost of containers to come across from overseas. A large percentage of tires are not made in this country and there is a surcharge from the government. I think these suppliers are gouging people.”
Kelleher added it has become more time-consuming to search for tires due to less availability.
“Usually it took me an hour to do at night,” he said. “Now, I’m up to almost two hours to find product. There is a lack of product out there.”
Despite some of the recent challenges, Kelleher has noticed sales are recovering.
“COVID definitely hurt us,” he said. “We were in a slump, but business is pretty decent.”