The Washington times., 1925-09-09

on rubber values conSiderab
market.
In the month of August, 1924,
the highest quotation on immediate
delivery rubber was 27K cents From
this point rubber rose slowly, but
more or less steadily. until in April,
1925. 1t reached high point of
45% cents.
The, larger tire manufacturers al
ways have rubber. bought ahead
for several months, and during the
early part of 1925 they resisted any
price advances on tires and gave
the public the benefit of previous
rubber purchases at lower prices
than the early 1925 levels.
With rubber steadily advancing,
however, the average cost. to the
manufacturer of tires was increas-
ing, and when rubber had gone
from % cents to As cents tire
prices. were necessarily advanced in
May.
The month of May usually marks
the beginning Of the active tire
buying season, and with rubber
consumption increasing and the
worlds surplus diminishing, it is
not surprising that rapid advances
in crude rubber prices occurred.
In May rubber reached a high
point of 691z cents.
Mounts Over Dollar
In June the high point was SO g
cents.
BY July it reached s1.21, which
is the highest price quoted for
years.
The price of $1.21, however, had
little or nothing to do with present
tire prices, as practically no rubber
was bought at this price by the Inn
portant tire manufacturers.
In other words, the $1.21 figure
was largely fictitious as far as the
cost of tires is concerned because
practically no rubber at this price
has entered into the production of
tires.
If it had tire prices would be
q lot higher than they are now.
With a high point of $1.21 and
O low point of us cents in July
there was a slight reaction in Au-
cents and the low price being Tx
cents.
Seventy-one cents seems like q
big drop from $1.21 and It is this
decline that has caused people &c
wonder how soon q reduction III
tire prices will occur.
The fact is, however, that present
tire prices are based on rubber
bought at less than IL cents and
lower than spot rubber has been
quoted since May.
Based on May Prices.
This is easy to understand when
one realizes that tire prices prior
to May were established in October,
1924. and were based on rubber
at about 81 cents.
The lowest price at which rubber
has been available since June Is a
cents, which is an increase or 163
per cent over the rubber cost on
which tire prices were based prior
to May.
In the meantime, tire prices have |
been. increased only about 35 per
cent.
1t is plainly evident, then, that /
the public is still getting the bene-
fit of lower-priced rubber pur-
chased before the recent sharp ad-
vances, and there is no likelihood
OF a reduction from present tire
price levels unless rubber should
0ecllne materially.
AS a matter Of fact, however,
after a brief reaction early in Au
gust when spot rubber reached the
low point Of II cents. it immediate
ly started to advance again and,
at the time of this writing is
quoted at 81 cents.
II a price Of even II cents were
maintained permanently, tire prices
would have to be advanced again
after present stocks of lower priced
rubber were exhausted.
But, in any event, with rubber
at 81 cents, as at present, there
seems to be no possibility Of any
early decline in tire prices.
Disclosed by Table
The following table shows the
high and low spot rubber quotations |
for the past twelve months: