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Tyre drought rolls on

PLANT Demand in China and lack of raw materials could prolong tyre shortage into 2007

THE ACUTE tyre shortage afflicting heavy earthmoving machinery is likely to continue for another two years.

With soaring demand in China and a time lag before production capacity can be increased, the tyre shortage will not be redressed before the end of 2006, tyremakers have warned.

'There is light at the end of the tunnel, it's just a very long tunnel, ' said Barry Coleman, product manager for heavy earthmoving tyres at manufacturer Bridgestone.

He continued: 'There is an obvious reason for the shortage, and that's China.

Demand has doubled - both for raw materials and for the end product.'

The result is that machines around the world are standing idle through lack of tyres.

Mr Coleman said: 'This is just beginning to happen in the UK. It's a serious situation.'

The problems began at the start of last year when the surge in Chinese demand for steel sent prices soaring. Initially there were enough tyres in the supply chain to mask the shortage.

Mr Coleman said: 'We are running without inventory now and everyone's got the same problem.The lead time for placing an order in Japan and getting it over here is 3-4 months and they're all pre-sold.

'We're producing at full capacity and we could easily sell our factory allocation two times over. Unfortunately tyre production isn't something you can switch on and off.

You can't create a rubber plantation in a year and new moulds can take between nine and 12 months.'

The problem is aggravated because many of the customers for big tyres are involved in the extraction of the raw materials needed to make tyres.Mr Coleman said: 'Commodities such as coal are difficult to buy. It's a vicious circle.'