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Pursuing tyremakers, Europe's steel cord producers are heading to the east of the region, writes Jennie Wilkinson.
European steel tyre cord supply is dominated by a handful of independent and integrated producers, the latter comprising those that also make tyres. Belgium's Bekaert, with a 20% global market share, and TrefilArbed in Luxembourg are among the top independent European tyre cord producers, while tyremakers such as Goodyear, Michelin, Bridgestone and Pirelli also make cord and together with other integrated suppliers represent around 45% of the global market. The market is very competitive and steel cord manufacturers are, of course, heavily reliant on automotive demand.
Steel cord represents approximately 8% of the total weight of a tyre, says producer TrefilArbed. "Tyre sizes differ but an average passenger vehicle tyre can contain from 0.6kg to over 1kg of cord," confirms Jozef Vanhoutte, director of market research and planning at Bekaert.
Bekaert says that global steel cord demand approached 1.3m tonnes and production was almost 1.4m tonnes in 2001, which represented an over-capacity of around 7%. The group says that this situation is not helped by the fact that almost half the market is taken by the integrated suppliers, which means that the independent cord suppliers have little control on pricing.
Europe accounts for approximately one-third of the global market, with the balance being roughly divided between the USA and Japan, while China is becoming an important area of growth. Western European steel cord consumption is forecast to reach between 250,000 and 275,000 tonnes this year, eastern Europe is expected to consume between 60,000 and 70,000 tonnes, and Russia a further 50,000 tonnes, according to TrefilArbed.
Although EU tyre production was lower last year than in 2001 because of a general downturn in automotive sales, central Europe saw an increase. Total EU car tyre output was approximately 204m units last year, while central Europe produced almost 45m tyres, up from almost 42m in 2001, according to LMC, a UK-based automotive business and consultancy group (see table).
Tyre cord production is moving from western Europe into the central and eastern regions. "With the collapse of the communist regime, countries like Poland and Slovenia have been restructuring and modernising their manufacturing industries and we are now seeing...