Recently shipping cost has a large rise and keeps rise, here are the reasons as following:
European routes have been significantly affected by the crisis in the Red Sea, forcing ships to detour around Africa. The African route originally had limited capacity, but this year has seen an influx of vessels. Longer voyages and increased transshipment ports have led to more vessels needing to operate. Extended journeys coupled with port congestion have resulted in many containers not returning. This is also the main reason for the recent container shortage.
2.The price increase in South America is mainly due to Brazil’s and Mexico’s plans to impose additional tariffs on Chinese electric vehicles in July and beyond. Many automakers are desperately shipping to these regions without actual orders. According to a source, BYD has already shipped more than 100,000 vehicles! Electric vehicle companies have seized the majority of shipping resources. Many shipping companies withdrew vessels from running to West Africa for these large orders, leading to a general increase in rates in West Africa! These EV makers not only compete for shipping resources but also reportedly fill up destination ports’ yards quickly with automobiles.
3.The U.S. election has been claiming future tariffs of 50-60% on Chinese goods, nearing the election day, which has led some Chinese companies to increase their investment in South America! Additionally, many importers are stocking up in advance, causing the peak season to arrive early.
4.This is the real reason, shipping giants are taking advantage of the above reasons and actively and tacitly raising prices together!
Exporting companies need to plan their shipping schedules in advance, as everyone is scrambling for containers. Estimated Time of Arrival (ETA) is also unstable.
Since 2023, there has been a significant recovery in the Chinese tire industry. Data indicates that, in 2023, the cumulative production of all-steel tires in China reached 139 million units, marking a 14% year-on-year increase. Semi-steel tire production also saw substantial growth, with a cumulative output of 591 million units, reflecting a 22% year-on-year.
The recovery momentum in the tire industry has continued into the beginning of 2024. According to a report on China CCTV Finance’s “Economic Information Broadcast,” many tire manufacturing companies are experiencing a significant increase in orders, to the point where demand is surpassing supply.
Reaching Record Highs: Tire Companies Experience Booming
According to reports, many manufacturing companies have tire orders scheduled for delivery two months later, and product inventory has been reduced to its lowest level.
Wang Dong, the Foreign Trade Director of a tire manufacturing company in Qingzhou, Shandong, mentioned that the current annual production capacity for tires in the company is around 17.5 million units. Since 2023, they have been operating at full capacity.
The annual production of semi-steel tires was approximately 9 million units in 2022 and increased to 11.8 million units in 2023. The overall annual production of all-steel tires has seen an increase of around 15%.
Wang Dong explained that in January of this year, the company received more than 1.1 million foreign trade orders, but the total foreign trade production capacity of the company is 600,000 units, which is insufficient to meet the order demand.
The person in charge of a tire manufacturing company in Qingdao also stated that since 2023, tire supply has consistently fallen short of demand. Additionally, the current tire inventory level is relatively low, reduced by nearly 40% compared to the previous year. Overall, looking at the entire year of 2024, the orders are expected to remain saturated, with demand outpacing supply.
Furthermore, Wanda Tire mentioned that with the continuous strong demand for travel, the prosperity of the tire industry keeps rising. Currently, the order book is full, especially for semi-steel tires, which are in high demand.
Linglong Tire also revealed that both domestic and international orders for semi-steel tires are consistently strong, exceeding production capacity. Moreover, there is still significant room for growth in orders for all-steel tires.
Setting Export Records: Chinese Tires in High Demand Overseas
In 2023, both the production and sales of automobiles in China exceeded 30 million units, reaching a historic high. The rapid growth in the production and sales of new energy vehicles played a significant role in driving the demand in the tire market.
On the other hand, a substantial increase in exports has also emerged as another key factor driving the significant growth in tire production and sales.
With the global tire market undergoing replacement and supporting recovery, Chinese tires have a significant advantage in cost-effectiveness in the context of high inflation in European and American markets. The export volume of semi-steel tires from China reached around 287 million units in 2023, representing a year-on-year increase of 20%.
A representative of a tire trading company in Qingdao, Shandong, stated that there is currently a robust demand from overseas customers, with orders pouring in.
In 2023, the export volume of tires for this company reached around 1.3 million units, marking an increase of over 30% compared to the previous year. The person in charge explained that the increase in demand for the export of semi-steel tires is particularly pronounced, and both they and the factories are facing queues for orders.
In terms of overseas demand, the Middle East market has experienced noticeable growth, and there has also been a significant increase in demand from Russia and Europe.
The Overseas Recognition of Chinese Tires is Increasing
Han Long, the General Manager of Foreign Trade at Shandong Haohua Tire, mentioned that customers who used to buy tires from leading international brands are now turning to Chinese tires. This shift is attributed to the high cost-effectiveness of Chinese tires. After the first transaction, customers exhibit a strong willingness to make repeat purchases.
Jiang Yun, a tire analyst at Zhuochuang Information, noted that favorable factors such as positive exchange rates, reasonable sea freight rates, and other benefits like high energy prices in Europe have positively influenced the export of Chinese tires.
Moreover, with the continuous advancement of the “Belt and Road” initiative in recent years and an increasing number of participating countries, the economies along the route are improving. This trend provides broad development opportunities for tire companies. Coupled with the continuous improvement and enhancement of the quality of Chinese tire products, their acceptance in overseas countries is also on the rise.
With a Positive Outlook on Tire Demand, Overseas Plant Construction by Companies Accelerates
With the overseas market demand booming and a substantial increase in tire exports, many tire companies are accelerating their pace in establishing factories abroad to further expand production capacity and prepare for future market competition.
Qin Jingbo, the Deputy General Manager of Qingdao Senkeer Tire, mentioned that the overall production capacity of their manufacturing bases in China and Thailand is 31 million units. However, this capacity is insufficient to meet the demand from orders. Senkeer Tire’s third production base is scheduled to be completed in Morocco in the second half of 2024, with an initial capacity of 6 million units. In addition, the factory in Spain is also in full swing in its preparations.
Qin Jingbo explained that since 2023, there has been a significant increase in export demand, with export orders currently accounting for around 80% of the overall sales volume. Establishing overseas factories provides certain advantages in terms of raw material and transportation costs. Additionally, it allows companies to navigate trade barriers, meeting the continuously growing export demand.
In recent times, several large domestic tire companies have announced plans to build factories overseas.
Triangle Tire’s First Venture into North America
On December 16, 2023, Triangle Tire’s subsidiary, Triangle Singapore, signed a joint venture agreement with TD Corporation in Mexico. They plan to invest $240 million to build a factory with an annual capacity of 6 million units for semi-steel radial tires in Mexico. This marks the first time a Chinese tire company has ventured into North America. Furthermore, Triangle’s plans for investing in and constructing a semi-steel radial tire factory in Mexico are also in progress.
On January 12th, the second phase of the General Corporation’s project in Cambodia officially began construction. In addition, Wanda Tire is actively advancing its factory construction plan in Cambodia. Following the establishment of factories in Thailand and Serbia, Linglong Tire is currently planning its third overseas factory.
It is evident that leading tire companies in China are rushing to fulfill orders, expand production capacity, and accelerate overseas expansion. The positive start to 2024 raises anticipation, and we await to see if this trend will continue throughout the year.
https://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpg00Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2024-01-17 17:56:542024-01-17 17:56:54CCTV Unveils: Why Are Chinese Tires in Short Supply?
According to foreign media reports, Goodyear is currently recalling a batch of newly launched UltraGrip Performance 3 winter tire products in the European market. The recalled tire size is 235/50 R18 101V XL, with a production date in the 27th week of 2023. The exact number of tires being recalled is not specified.
The European Union’s non-food product rapid alert system states that this batch of tires has manufacturing defects, which pose a risk of tread separation during high-speed driving.
It’s worth noting that Goodyear has initiated several recall events in the past.
In 2022, Goodyear recalled 173,000 tires produced between 1996 and 2003. The tire model was G159, with a size of 275/70 R22.5.
The U.S. National Highway Traffic Safety Administration (NHTSA) stated that this batch of products may face a risk of belt separation due to manufacturing issues, which “could lead to loss of vehicle control and increase the risk of a crash.”
It’s reported that this batch of tires has been associated with at least 95 incidents involving injuries or fatalities.
In 2020, there was a recall of a batch of Fortera HL all-season light truck tires with the size P255/65R18. The potential number of affected tires was 3,721. Going back to 2015, Goodyear recalled 48,500 Fortera HL tires due to tread cracking during testing.
In 2018, Dongfeng Peugeot, a subsidiary of Dongfeng Motor Corporation, announced a recall of certain Goodyear 215/50R17 tires that were originally fitted on some Dongfeng Peugeot 408 cars manufactured between February 20, 2014, and October 30, 2015. This recall affected approximately 102,851 vehicles, which translates to around 411,404 tires. The reason for the recall was that some Goodyear tires had insufficient ply cord strength, potentially leading to ply cord separation and sidewall bulging, posing safety risks.
https://www.mgltyre.com/wp-content/uploads/2023/11/640.png322554Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2023-11-06 16:56:572023-11-06 16:57:14Risks on the road: Urgent recall of top-brand tires!
Semi truck tires are the unsung heroes of the road, playing a critical role in keeping the wheels of commerce turning. For those in the trucking industry, understanding the essentials of semi truck tires is key to a successful journey. In this guide, we’ll explore the basics of semi truck tires, from types and advantages to simple maintenance tips, ensuring your trucks stay safe and efficient on the highways.
Types of Semi Truck Tires:
All-Position Tires: These versatile tires work well on different wheel positions, from steering to drive axles, making them a solid choice for diverse tasks.
Drive Tires: Positioned on the rear axles, drive tires provide the necessary grip for hauling heavy loads and getting your truck moving smoothly.
Steer Tires: Found on the front axle, steer tires are vital for precise steering and navigating turns with confidence.
Trailer Tires: Designed for trailers, these tires focus on durability and stability, ensuring a smooth ride for your cargo.
Advantages of Semi Truck Tires:
Load Support: Semi truck tires are engineered to carry substantial loads, promoting even weight distribution and a stable ride.
Longevity: With their tough build, these tires are built to withstand the demands of long-haul journeys, reducing the need for frequent replacements.
Fuel Efficiency: The right semi truck tires can lead to better fuel economy, thanks to reduced rolling resistance that saves you money at the pump.
Safety First: Premium semi truck tires offer reliable traction and braking, ensuring safer travels even in challenging road conditions.
Easy Maintenance Tips for Semi Truck Tires:
Regular Glance: Take a moment to visually inspect your tires for any visible issues like cuts, bulges, or punctures before hitting the road.
Proper Pressure: Maintaining the right tire pressure is vital for optimal performance. Keep an eye on it and adjust as needed.
Rotation Routine: Regularly rotating your semi truck tires helps even out wear and extends their lifespan, contributing to smoother rides.
Alignment Awareness: Keep your truck’s wheel alignment in check to prevent uneven tire wear and ensure steady handling.
Semi truck tires may not always be in the spotlight, but they’re an essential part of keeping goods moving across the country. By familiarizing yourself with the different types, benefits, and basic maintenance practices of semi truck tires, you’re setting yourself up for safer, more efficient journeys. Remember, a little care goes a long way in making sure your semi truck tires deliver a smooth and reliable ride, mile after mile.
https://www.mgltyre.com/wp-content/uploads/2022/09/E-Max-D1-scaled.jpg25601834Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2023-08-09 15:04:362023-08-09 15:04:37Navigating the World of Semi Truck Tires: A Comprehensive Guide
When it comes to maximizing the performance and safety of your truck, selecting the right set of tires is of utmost importance. Whether you’re a commercial truck driver, an off-road enthusiast, or simply a truck owner looking for optimal road grip, understanding the key factors involved in choosing truck tires is crucial. In this comprehensive guide, we’ll explore the ins and outs of truck tires, including their types, features, and how to make an informed decision that aligns with your specific needs. So, let’s dive in and discover the world of truck tires.
Understanding Truck Tires:
Truck tires are specifically designed to withstand the heavy loads, demanding terrains, and unique requirements of trucks. They come in various sizes, tread patterns, and compositions, allowing you to tailor your choice based on the intended use of your truck. The three primary types of truck tires are all-season, all-terrain, and mud-terrain tires. Each type serves a distinct purpose and offers different advantages depending on the driving conditions you encounter.
All-Season Truck Tires:
All-season truck tires are a popular choice for everyday driving on paved roads. They provide a smooth and comfortable ride, good traction in both wet and dry conditions, and decent performance in light snow. These tires are a practical option if you primarily drive on highways or city roads and encounter mild weather variations.
All-Terrain Truck Tires:
If you find yourself frequently venturing off the beaten path, all-terrain truck tires are designed to handle a variety of surfaces. They offer enhanced traction on gravel, dirt, and grass, making them suitable for light off-roading. All-terrain tires strike a balance between on-road comfort and off-road capability, making them versatile for truck owners who enjoy occasional adventures.
Mud-Terrain Truck Tires:
For truck enthusiasts who frequently traverse challenging off-road terrains such as mud, rocks, and steep inclines, mud-terrain truck tires are the go-to choice. These tires feature an aggressive tread pattern, wider voids, and reinforced sidewalls to provide maximum traction and durability in extreme conditions. However, they may generate more noise and provide a slightly rougher ride on paved roads.
Key Considerations for Choosing Truck Tires:
a. Load Rating and Size: Ensure that the tires you select have an appropriate load rating to support the weight of your truck and its cargo. Refer to your vehicle’s manual or consult with a tire professional to determine the correct tire size.
b. Tread Pattern: Different tread patterns offer varying levels of traction and performance on different surfaces. Consider the typical driving conditions you encounter to choose the most suitable tread pattern for your needs.
c. Durability and Longevity: Look for tires made from high-quality materials that are known for their durability and long tread life. Investing in tires with good longevity can save you money in the long run.
d. Weather Conditions: If you frequently drive in regions with severe weather conditions, such as heavy snow or ice, consider tires with specific winter ratings for improved traction and safety.
Conclusion:
Selecting the right truck tire is crucial for optimizing your truck’s performance, safety, and overall driving experience. Whether you require all-season versatility, off-road capabilities, or ultimate mud-traversing prowess, understanding the different types of truck tires and their features empowers you to make an informed decision. By considering factors such as load rating, tread pattern, durability, and weather conditions, you can find the perfect truck tire that meets your specific needs. Remember, consulting with a tire professional is always beneficial to ensure you make the best choice for your truck. So, equip your truck with the right tires, hit the road with confidence, and enjoy the journey.
When it comes to finding a reliable tire supplier, there are several factors you need to consider. From the quality of the products to the reliability of the supplier, there are several things you need to take into account to ensure that you are working with a trustworthy and reputable supplier. In this article, we’ll take a look at some tips for finding a reliable tire supplier that you can trust.
Research the Supplier
Before you start working with any tire supplier, it’s important to do your research. Look for reviews and testimonials online to get an idea of the supplier’s reputation. You can also check with industry organizations and associations to see if the supplier has any certifications or accreditations.
Check the Quality of the Products
The quality of the tires that a supplier provides is a critical factor in your decision-making process. Look for a supplier that offers high-quality products that meet your needs and requirements. Check the manufacturer’s specifications and ratings to ensure that the tires are safe and reliable.
Consider the Supplier’s Experience
Experience is important when it comes to tire suppliers. Look for a supplier that has been in business for several years and has a proven track record of providing high-quality products and excellent customer service. A supplier with a long history of success is more likely to be reliable and trustworthy.
Evaluate the Supplier’s Customer Service
You want to work with a supplier that provides excellent customer service. Look for a supplier that is responsive to your needs and concerns, and that is willing to work with you to find the best solution for your business. A good supplier should be easy to communicate with and should provide prompt and courteous service.
Check the Supplier’s Delivery Times and Availability
When you’re working with a tire supplier, it’s important to ensure that they can deliver the products you need when you need them. Check the supplier’s delivery times and availability to ensure that they can meet your requirements. Look for a supplier that has a reliable and efficient delivery system in place to ensure that your orders are delivered on time and in good condition.
In conclusion, finding a reliable tire supplier is essential for any business that relies on tires. By doing your research, checking the quality of the products, evaluating the supplier’s experience and customer service, and checking the supplier’s delivery times and availability, you can find a supplier that you can trust and rely on. With a reliable tire supplier, you can ensure that your business has the products it needs to succeed.
Recently, Guizhou Advance released the price increase news, notifying that the price of all-steel TBR tires will increase by 2% from February 15th.
Tire companies blowout price increases
Zhongce’s three consecutive rises
Zhongce Rubber issued a price increase notice, announcing that from March 1, the price of all all-steel tire products under the company will be increased by 2%-3%.
This is already the third consecutive rise of Zhongce within two months. Previously, Zhongce decided to increase the price of all all-steel radial tire products by 1% starting from January 1, and to increase the price of the above-mentioned products by another 1% starting from January 15.
Chengshin second consecutive rise
Chengshin Rubber issued a price increase notice, announcing that from March 1, the price of some products of the company’s brand Maxxis all-steel radial tire (TBR) will increase by 3%.
Just a few years ago, Chengshin Rubber issued a price increase notice. Announced that the price of Maxxis PCR/LTR/TBR products will increase by 3%-5% from January 1st.
In addition, many tire companies have also issued price increase notices.
The following is our summary of nearly 40 tire companies that will increase prices in 2023.
The price of the enterprise is insured, and the tires only rise but not fall
Zhongce Rubber has decided that from December 2022 to February 2023, if there is a price reduction for all all-steel radial tire products, it will promise to guarantee the price.
Hubei Jingkangrui Trading Co., Ltd. issued a price increase letter, announcing that the invoice price of Jingkangrui series products will increase by 3% from December 26, 2022. And before March 1, 2023, the principle of value preservation will be adhered to. If there is a price difference within this period, we will promise to provide value preservation!
High raw material prices
Recently, the price of upstream raw materials such as natural rubber and petroleum has continued to be high, resulting in the continuous increase in tire costs, which is the main reason for the price increase of tire companies.
On the first trading day after the Spring Festival, natural rubber futures opened higher, and the main contract opened at 13,610 yuan/ton, a relatively obvious increase.
Although the price of rubber has fallen back recently, it is still at a high level.
https://www.mgltyre.com/wp-content/uploads/2023/02/Tire-Price-Increase.jpg400800Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2023-02-08 17:55:222023-02-08 17:55:23Three consecutive rises! Notifications of tire price increases are flying all over the sky
In 2022, the epidemic will recur, the conflict between Russia and Ukraine will cause global economic turmoil, international big-name tire companies will lay off employees one after another, and the performance of major domestic tire companies will face a huge impact.
Recently, a number of tire companies have released performance forecasts. Some tire companies have achieved profit growth, while some tire companies have experienced a sharp decline in profit.
Linglong Tire expects net profit to decrease by 510 million to 550 million yuan
Linglong Tire expects its annual net profit in 2022 to be 240 million to 280 million yuan, a decrease of 510 million to 550 million yuan compared with the same period of the previous year, a year-on-year decrease of 65% to 70%.
It is estimated that in 2022, the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses will be 150 million to 170 million yuan.Compared with the same period last year, it will decrease by 470 million to 500 million yuan, a year-on-year decrease of 74% to 77%.
Linglong Tire stated that the pre-reduction in performance is mainly due to the decrease in the company’s overall gross profit margin in 2022. There are three main factors:
(1) The impact of rising prices of major raw materials. In 2022, Linglong Tire will be greatly affected by fluctuations in raw material prices, and the prices of major raw materials such as synthetic rubber and carbon black will rise sharply, resulting in higher tire production costs and lower gross profit margins.
(2) Declining demand. First, the demand for supporting equipment has declined. According to the statistics of the China Association of Automobile Manufacturers, from January to December 2022, the production and sales of commercial vehicles will be 3.185 million and 3.3 million, respectively, a year-on-year decrease of 31.9% and 31.2%. The volumes were 723,400 and 767,600, respectively, a year-on-year decrease of 50.68% and 51.23%. Due to the relatively high proportion of all-steel tires supplied by Linglong Tire, it is greatly affected by the decline in production and sales of commercial vehicles. Second, the demand in the replacement market has declined. Affected by the epidemic control, travel and logistics transportation have been affected. In addition, the huge fluctuation of sea freight has affected the shipment of overseas customers, and the market demand has further decreased, which has seriously affected the replacement market.
(3) Affected by repeated epidemics, the company’s subsidiaries have also suspended production to varying degrees, and the attendance rate of employees has declined, and the overall production capacity has been limited.
Huayi Group, the parent company of Double Coin Tire, is expected to reduce by 1.617 billion yuan to 1.817 billion yuan
Huayi Group released the “2022 Annual Performance Prediction Announcement”. According to the announcement, it is estimated that the net profit attributable to shareholders of listed companies in 2022 will be 1.15 billion to 1.35 billion yuan, which will decrease by 1.617 billion to 1.817 billion yuan compared with the net profit of 2.967 billion yuan in the same period last year, a year-on-year decrease of 54.51% to 61.25%.
It is estimated that the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses will be 750 million to 950 million yuan, which will decrease by about 1.67 billion to 1.87 billion yuan compared with the net profit of 2.624 billion yuan in the same period last year, a year-on-year decrease of 63.80% to 71.42%.
Huayi Group also stated that the main reason for the pre-reduction of performance in the current period is that in 2022, affected by the market environment of the chemical industry, the sales prices of the main products acetic acid and acrylic acid dropped sharply, resulting in a sharp drop in operating profit year-on-year.
Giti Tire’s net profit ranges from 292 million to 438 million yuan
The 2022 performance forecast of Giti Tire Co., Ltd. is expected to achieve a net profit attributable to shareholders of listed companies in 2022 of 292 million to 438 million yuan (Note: Giti Tire only discloses part of the performance of listed companies); The net profit of listed company shareholders after deducting non-recurring gains and losses is 25.45 million yuan to 38.18 million yuan.
It is estimated that the operating income in 2022 will be 3.332 billion to 3.682 billion yuan; the estimated operating income after deducting business income not related to the main business and income without commercial substance is 3.301 billion to 3.649 billion yuan.
The main reasons for the changes in Giti Tire’s performance in the current period are as follows: During the reporting period, affected by factors such as the 2022 epidemic and logistics disruptions, the market demand was weak, and the company’s market sales volume decreased by about 5% year-on-year.
The main raw materials of Giti Tire are still operating at a high level, and the average cost of raw materials has increased more than the average selling price.
Giti Tire has continuously optimized the market and product structure to reduce the adverse impact of the external environment on the company’s operations and achieve healthy development of the company. During the reporting period, the gross profit margin decreased by about 1% year-on-year. Due to the fluctuation of the US dollar exchange rate and the reduction of loans, financial expenses have decreased, so that the net profit attributable to shareholders of listed companies during the reporting period has not changed much compared with last year.
Double Star Tire expects a net profit loss of 540 million to 670 million yuan
Qingdao Double Star Co., Ltd. issued a performance forecast for 2022. During the reporting period, the net profit loss attributable to shareholders of listed companies was 540 million to 670 million yuan; the net profit loss after deducting non-recurring gains and losses was 600 million to 740 million yuan; Income of 3.8 billion to 4.2 billion yuan; operating income after deductions of 3.7 billion to 4.1 billion yuan.
Doublestar Tire’s performance forecast reduction is mainly due to the impact of the company’s overall gross profit margin reduction in 2022. Due to the epidemic and the shortage of chips, the output of OEMs has been reduced. In 2022, the output of commercial vehicles will drop by more than 30% year-on-year, and road transportation will also drop sharply.
During the reporting period, due to unfavorable factors such as sharp fluctuations in raw material prices, high sea freight rates, conflicts between Russia and Ukraine, and interest rate hikes in the US dollar, the company’s costs and expenses increased, resulting in a loss of net profit attributable to shareholders of listed companies.
Aeolus Tire turned losses into profits, with an estimated net profit of 70 million to 90 million yuan
The performance of Aeolus Tire is expected to have a net profit of 70 million to 90 million yuan in 2022, and the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses is 40 million to 60 million yuan.
It is expected that Aeolus Tire will realize a turnaround in net profit attributable to shareholders of listed companies in 2022 compared with the same period of the previous year.
The improvement in Fengshen Tire’s performance is mainly due to the further increase in product structure and market structure adjustment in 2022, and actively promoting marketing innovation, technological innovation, and management innovation. The proportion of products and markets with better profitability has increased significantly, helping the company to improve its profitability.
https://www.mgltyre.com/wp-content/uploads/2023/02/tire-profit-large-down.jpeg6601080Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2023-02-02 16:01:412023-02-02 16:01:42Profit felled sharply! for most Chinese tire companies in 2022.
Recently, the news of tire price increases is almost every day.
Today, Triangle Tire issued a price increase notice. Due to the continued high price of raw materials, it announced that the price of some PCR products and various product series of commercial vehicle tires will increase by 2%-3% from January 1, 2023.
Zhejiang Sailun also issued a price increase notice, announcing that the price of all its products will increase by 2%-3% from December 26.
Yesterday, TERCELO Rubber also issued a price adjustment notice. Due to the recent high price of raw materials, the company’s production costs have continued to increase. In order to ensure product quality and service, it announced that it will replace all brand TBR products in the domestic market from January 1, 2023. Prices are adjusted.
At present, more than 30 tire companies have announced price increases.
The rising cost of tire manufacturing is the main reason for the price increase of tires. The data shows that as of December 16, 2022, the average price of my country’s natural rubber market is 12,483 yuan/ton, an increase of 10.2% from the beginning of November; the average price of carbon black is 11,294 yuan/ton, an increase of 10.13% from the beginning of September. An increase of 23.78% from the beginning of 2022.
And a price guarantee notice from Zhongce Rubber shows that the price of tires will only rise and not fall in the near future.
https://www.mgltyre.com/wp-content/uploads/2022/12/tire-price-rise.jpg376700Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2022-12-21 17:30:212022-12-21 17:30:22Tire price starts to rise in Jan. of 2023
As major tire companies at home and abroad have released their financial report data for the first half of the year, we can finally understand what has changed in the tire market in the first half of this year from the perspective of tire companies.
Unsurprisingly, the overall situation of China’s major tire companies in the first half of the year was obviously not as optimistic as that of their foreign counterparts.
Top 10 domestic and foreign tire companies in the first half of the year
In the global tire company revenue ranking, European tire companies have been affected by the Russian-Ukrainian conflict and the weak European economy, and the ranking has been greatly affected.
In terms of changes in revenue and net profit, various companies have shown a relatively obvious trend of “revenue rising and profit falling”.
In the revenue ranking of domestic listed tire companies, Sailun overtook Linglong to the first position.
In terms of changes in net profit and operating income, the data of domestic companies objectively reflects the current cold tire market.
The death of tires in data
It can be seen from the revenue in the first half of the year that although there is still a certain distance between Chinese tire companies and the world’s top 10, the gap is narrowing.
However, this does not mean that Chinese tire companies had better luck than foreign companies in the first half of the year.
The first half of the international tire giant: revenue returns to 2019 levels
If you pay attention to the revenue and net profit data of the international tire giants, it is not difficult to find that the major multinational tire manufacturers have increased their revenue.
This is mainly due to the relatively strong market dividends in the international tire market.
Some international tire companies said that even though they withdrew from some markets in the first half of the year due to the impact of the international situation, the accelerated economic recovery in various countries after the epidemic has generated more tire consumption demand, which has made the company’s revenue in the first half of the year a good one. Performance.
Some tire companies said that the current revenue of the company has returned to the level before the outbreak in 2019.
But good revenue cannot cover up the cost dilemma that tire companies are facing.
On the other hand, in the net profit column of various companies, except for a few companies that achieved profit increases due to merger adjustments or differences in market direction, most tire giants’ net profit in the first half of the year declined to varying degrees or even suffered losses.
The reason is that the recent rising commodity prices and the soaring international shipping costs at the beginning of the year have directly increased the cost of tire production and sales.
Therefore, we have seen more international tire companies express in their semi-annual financial reports that they will optimize the existing tire production capacity structure and refine their business to cope with the increasingly serious cost problems.
The first half of the domestic tire manufacturers: revenue and profit double decline
If the international tire giants can still be gratified by the improvement in revenue, then the first half of the domestic tire listed companies can only be described as tragic.
We saw that in the first half of the year, most of the major domestic listed tire companies were in the process of “double decline” in revenue and net profit.
In addition to facing serious tire production and sales cost problems like international tire companies, the deserted domestic tire market is even worse.
In the financial reports of foreign tire companies, nearly half of them mentioned the downturn of their own Chinese tire market, which shows the coldness of the Chinese tire market in the first half of this year.
Since most domestic tire companies focus on the domestic market, in the first half of this year, many of the top ten domestic listed tire companies in terms of revenue have experienced a downward trend in revenue, with a year-on-year decline ranging from 1-20%.
The net profit performance was even worse. Except for Sailun and Sentirin, which mainly focus on the international market, the net profit of other listed tire companies has declined by more than 18%.
In recent years, the trend of China’s tire market from an incremental market to a stock market is obvious to all. The lack of domestic market demand may become the norm for a period of time in the future.
In the face of changes in the market trend, domestic listed tire companies are seeking to “go global”. Most tire companies mentioned the progress of their overseas factories in their semi-annual financial reports.
https://www.mgltyre.com/wp-content/uploads/2022/09/33a93c060cb5461e9fe691be6a4a8e0a.jpg5911080Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2022-09-01 17:15:532022-09-01 17:16:09Operation of Chinese tire company, the worst in the world!
Recently, the waste tire market is very hot, and the price has risen sharply. Taking steel tires above 900 yuan as an example, the lowest price in 2019 is only 750 yuan/ton, and the highest in 2021 is 1290 yuan per ton. In March this year, the highest price of Zouping steel wire tires above 900 yuan reached 1835 yuan/ton, a year-on-year increase of 2019 and 2021. As high as 144.67%, 42.25%.
Some time ago, the recycling price of steel wire above 9.0 inches in some areas even rose to 2,000 yuan / ton.
Especially since the Spring Festival this year, affected by the sharp rise in bulk raw materials, the price of scrap tires has ushered in a sharp rise, with an increase of nearly 20%. The sharp rise is evident.
Scrap tire prices continue to rise
According to the recycled rubber price data on “Jiaoyoutong”, the price of waste tires in most areas is still high. In particular, the price of waste steel wire tires in Yutian in North China reached 1,800.83 yuan per ton, an increase of 253.27 yuan per ton compared with the previous quarter, an increase of 16.37%. The price of Pingyao in North China also reached 1640 yuan / ton.
Although the price of waste steel wire tires in Zouping has dropped to a certain extent, it is still at 1680.7 yuan / ton, and the price is still running at a high level. As the price of raw materials for tire manufacturing is still strong, and the country’s continuous increase in resource recycling and environmental protection, the market demand for scrap tires is still strong. In the recent period, the price of scrap tires will still be on the rise.
The all-steel tire market has changed, and everyone is ready for hard times.
Difficulty will change, change will pass, and general will last. When a business is or may be in trouble, only flexibility can last. The market has changed, and operators need to follow the changes.
In the present, only transformation can lead to a way out. Whoever succeeds in the transformation first and who starts the new strategy first will have a place in the new market environment.
When will the all-steel tire market improve? When will it end? Is the future better or worse? To clarify this issue, it is necessary to analyze the factors that affect the all-steel tire market.
Short-term factors: the new crown epidemic, no epidemic will not pass, three years after the big epidemic, the current trend of the epidemic has entered the end stage, and it can be overcome no matter how hard it is to bite the bullet.
China truck tire market has changed
In fact, the relationship between economic development and tire demand is very close, such as the three major carriages of the Chinese economy, infrastructure, consumption, and exports.
Infrastructure construction: road construction, bridge construction, high-speed rail, water conservancy projects, etc., raw materials need to be dug out by mine trucks, transported by transport vehicles to the processing plant, and then transported from the processing plant to the construction site, all of which are inseparable from the wear and tear of engineering tires and all-steel tires.
Consumption: The two major parts of consumption are real estate and automobiles. Needless to say, a car needs to be equipped with 4 tires. If there are too many cars, there will be another wave of demand in the replacement market after a few years. Real estate is similar to infrastructure, and it is inseparable from the wear and tear of engineering tires and all-steel tires. Real estate makes money. People are rich and can’t get the whole car? Got 4 more tires.
Export market: China is the world’s factory and the world’s largest tire exporter. More than 50% of China’s tires need to be exported overseas.
Why is the tire business not doing well this year? Mainly because the “three carriages” of the Chinese economy have all experienced problems.
Export: The export market is currently the best market among the three major markets, but with the inflation rate hike in the United States and the conflict between Russia and Ukraine, the global economic recovery is facing challenges.
Infrastructure: traditional infrastructure construction of roads, bridges, high-speed railways, water conservancy projects, all of which should be built. The current advocacy is new infrastructure, 5G, big data centers, artificial intelligence, industrial Internet, UHV, new energy vehicle charging piles, urban rail transit, which have low demand for tires.
Consumption: First of all, the epidemic has suppressed the demand for tires in the short term. The long-term impact is that the real estate has continued to decline since the second half of last year. The thunderstorms of real estate companies in various places have increased sharply, and the owners have cut off the supply.
Real estate has not been able to drive China’s economic development. High housing prices have seriously suppressed the consumption power of Chinese people. If the bubble rises again, it will cause even greater harm.
Zhang Guangqiang of Pingdingshan Hongshun Tire Firm believes that the all-steel tire business is dependent on the real estate business, and the real estate business is gradually declining, and the all-steel tire business will not be much better.
Having said that, I want to tell you that the tire demand is sluggish, the epidemic is only a short-term factor, and the long-term is China’s economic transformation!
The logic of tire demand has changed, old infrastructure has become new infrastructure, real estate has ebb, etc. It is undeniable that even if the epidemic passes and the economy recovers, it is difficult for the tire demand market to return to the past, and the biggest impact here is the all-steel tire market.
How tire operators break out of the siege?
As the saying goes, the market is not good or bad, only those who do well and those who do not. Even in the worst markets, there are good operators.
Mr. Zhang of Hongshun Tire Company believes that no matter how bad the school is, there are still good students, and no matter how difficult it is to do business, there are some people who do better than their peers. If you find out the good peers, you will find that they have some things in common. Features, you just do it.
At present, the operation of all-steel tires is developing towards these trends.
Marginal multi-category operation
In the past, tire shops only sold tires and nothing else. In the future, all-steel tire stores will develop towards comprehensive service stores just like car tires.
Grease, batteries, air conditioner filters, brake fluid, coolant, wipers, floor mats, etc. will become the products of tire shops.
Mr. Zhang said that the stores with good business now have more types of products, and they are all marginally diversified operations. They sell large tires and small tires, as well as electric vehicle tires and agricultural tires. The production for the surrounding people, daily Travel services and get paid accordingly.
Increase service capacity
When the product falls into low-price competition and it is difficult to make a profit, service upgrade is a good way out. When product sales are difficult to survive, many operators will improve service levels to build a competitive moat.
There are two main purposes of increasing services, one is to retain customers, and the other is to create more profit points.
For example, it has opened up businesses such as rescue, electric welding, and quick repair and quick insurance, provided tea services for passing drivers, and built a space for drivers to rest and entertain.
Write at the end
Truck tire market has changed, and everyone is ready for hard times.
Difficulty will change, change will pass, and adapt will last. When a business is or may be in trouble, only flexibility can last. The market has changed, and operators need to follow the changes.
In the present, only transformation can lead to a way out. Whoever succeeds in the transformation first and who starts the new strategy first will have a place in the new market environment.
https://www.mgltyre.com/wp-content/uploads/2022/07/tire-hard-time.jpg365547Bill Liuhttps://www.mgltyre.com/wp-content/uploads/2021/12/logo-tire-solution-1-1030x191.jpgBill Liu2022-07-29 15:29:422022-07-29 15:29:45Get ready for hard times. China truck tire market has changed!
