Bekaert expects “subdued” first half for rubber reinforcement unit

Brussels – The global tire market is expected to remain subdued in the first half of 2025 due to the uncertain economic and political outlook, according to steel cord reinforcement supplier Bekaert.

While “changes in duties will impact supply-chains,” Bekaert said it is “potentially well positioned to mitigate [the effects] given our more local footprint and alternative sources of supply from various low-cost countries.”

The group added that its ‘rubber reinforcement’ business unit remains very focused on key account management and costs, and on the introduction of higher recycled steel content and higher performance tire cords.

Bekaert’s trading outlook accompanied its 2024 annual report, showing a “resilient performance” at the ‘rubber reinforcement’ unit helped by its focus on costs, mix and business-selection amid weaker end markets, particularly in Europe and China.

The division reported a 9.5% dip in third party sales, on 2.2% lower volumes and a 6.1% decline in passed-on material and energy costs amid “broadly stable” price and mix effects.

Rubber reinforcement sales volumes fell 3% in Europe and North America, on lower demand and increased tire imports, and by 5% in China, reflecting a very strong 2023 and lower economic activity there.

Volumes were up in Indonesia and in India, where new production capacity has now been installed to serve increasing local demand, added Bekaert.

“Competition in the global tire market continues to intensify, with weak demand in many regions,” commented the group, noting that it is pursuing selected growth opportunities for  ‘rubber reinforcement’ such as in India.

Underlying earnings (EBIT) at ‘rubber reinforcement’ came in at €150 million for 2024, down €34 million from the prior-year level, with margins impacted particularly in Europe on lower volumes and ‘utilisation’ levels.

Capex at the unit totalled €84 million, including on selected capacity investments in Vietnam and India, while Bekaert also reported one-off costs of €18 million mainly for restructuring projects in Belgium and China.