rubber prices up

Unbridled demand from China and soaring oil prices have sent world rubber prices soaring and earnings plunging for tyremakers and other rubber users.

"It's a nightmare - and we are living it every day," said Bridgestone Australia's executive director of finance, Andrew Moffatt.

Mr Moffatt was referring to the startling jump in prices on the Shanghai Commodities Exchange since the start of the year, when rubber was selling at 11,978 yuan ($1944) a tonne.

After a modest rise in the four months to April, the price for natural rubber has rocketed 36 per cent in three months to a record of ¥16,855.

The surge is causing havoc in purchasing departments across local industry, and not just the tyremakers. Ansell is also a big consumer, as is Nylex's Empire Rubber subsidiary, which is on the auction block.

The price rise is believed to have been a factor behind the recent under-performance of South Pacific Tyres, the Melbourne joint venture between Ansell and Goodyear of the US.

------I couldn't copy below this due to a moving ad, but the rest is in Fairfax or The Age