Conti sees improved outlook for materials costs

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Conti sees improved outlook for materials costs

HANOVER, Germany — Continental A.G.\’s Group has reduced its estimates for the negative impact of raw materials prices in 2017.

In its recently published third quarter results, Continental said was lowering its forecast for the average price of natural rubber (TSR 20) this year to $1.70 per kilogram from $1.90/kg.

Recent declines in raw materials prices, however, would not have an impact on its results until fiscal 2018, the German group pointed out in the financial statement.

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For butadiene, a base material for rubber, Continental said it was leaving its forecast at $1.60 per kg.

On the other hand, Continental predicted further price pressure as a result of price increases for carbon black and a recent rise in the price of crude .

For the Rubber Group, it noted every $10 increase in the average price of equates to a negative annual gross effect on pre-tax operating earnings of around $50 million.

Continental said it estimated the average price of Brent at $54 per barrel in 2017, up from $44 per barrel in 2016.

Overall, Conti still figures the negative impact of rising prices of raw materials for the Rubber Group in fiscal 2017 to be around $530 million.

– Tire Business

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