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Tire industry out of the trough to meet the turning point
2023/6/21
Recently, the tire industry has been in the doldrums for a long time in the demand-driven market has picked up. May, all-steel tire raw material prices shock down, especially carbon black and other auxiliary materials prices fell more significantly, "production and sales" has become the general condition of the tire industry this year, the industry start rate is also at a high level, the boom gradually improved.
In the past few days, the listed company Sai Lun tire, Sen Kirin, general shares, triangle tires, etc. in the investment interactive platform have said that the domestic market orders are sufficient, some enterprises on hand orders far more than the existing production capacity, some enterprises overseas half steel tire orders have been restored to the first half of last year, the market recovery signs obvious. Many institutions analysis that the raw material prices fall overlapping with the start rate, tire business profitability repair is expected, corporate profit space is expected to gradually open.
Cost decline in profitability space to be repaired
The production of tires required raw materials, rubber accounts for nearly half, followed by carbon black, steel cord, additives and other materials. Recently, as the price of the main raw materials for tires fell, their costs have also been able to fall, bringing high expectations for industry profit repair.
Zhuo Chuan information tire industry analyst Guo Juan said that the recent price of the main raw materials for tires showed a different range of decline, making tire production cost pressure has been effectively alleviated. Among them, raw materials, the average price of natural rubber in April 11524 yuan (ton price, the same below), down 10.72%; the average price of styrene-butadiene rubber 11605 yuan, down 6.06%; the average price of rebar 4085 yuan, down 20.25%; the average price of carbon black 9227 yuan, down 7.03%. May, China's carbon black market spot average price of 7281 yuan, down 17.06%, compared with the same period last year. The total production cost of a single all-steel tire (12R22.5 paracord, weight selected from 65 kg) fell to about 817 yuan / piece, down 4% YoY, down nearly 12% compared to the same period last year.
At the same time, there is also good shipping costs. With the world's dock congestion continues to ease, port capacity has been raised, shipping prices are expected to stabilize in a reasonable range, favorable to tire exports.
The industry believes that, with the decline in raw materials and transportation costs, tire companies are expected to gradually repair the profit space.
Demand rebound industry boom gradually rise
In the raw material prices decline, cost pressure to ease at the same time, in recent times the tire listed companies disclosed in April production and sales flash report shows that the tire industry production and sales situation also continued high growth trend.
Linglong tire said that the company's tire sales in April this year was 5,815,300, an increase of 31.63% year-on-year; the company's tire sales in the first four months was 22,545,700, an increase of 11.99% year-on-year. Triangle tire production and sales also performed well, since April the company's production capacity is close to full production, the current market sales stability, foreign trade orders are sufficient.
Industry analysis pointed out that this year, with the recovery of exports and domestic demand rebound, the tire business sales are good, the plant start-up rate to maintain a high level, in which the volume of tire exports have a significant repair.
In 2023, the unfavorable factors limiting the development of the tire industry gradually improved, the impact of the epidemic eliminated, the overall economic situation improved, the transport industry gradually recovered, the tire business start-up rate continued to run at a high level.
According to the data of Goldlink, in April, the overall start rate of tire enterprises was near 65.67%, including 69% for all-steel tires, 79% for semi-steel tires and 49% for bias tires. Tire exports also maintain high growth. General Administration of Customs data show that from January to April this year, China's rubber tire exports totaled 2.71 million tons, an increase of 11.8%; the export value of 47.461 billion yuan, an increase of 20.4%.
"At present, the domestic tire industry start rate to maintain a high level, production than the same period last year there was a significant increase, which also confirms from the side of the current tire downstream demand than last year has gradually recovered, tire industry boom gradually into the upward channel." Deppon Securities analysts said.
Responding to the "double reverse" to enhance the globalization of production capacity layout
Despite the recovery of the tire market, Europe and the United States "double anti" tax rate still make the tire industry is under pressure, domestic tire companies have chosen to build plants overseas, to enhance production capacity for globalization layout has become the main path of development of domestic tire companies.
According to statistics, as of the end of 2022, a total of 13 domestic tire production enterprises in overseas set up 16 production bases. Among them, the overseas factories of companies such as Sai Lun Tire and Sen Kirin Tire have become an important source of profit for enterprises.
In the past few days, the listed company Sai Lun tire, Sen Kirin, general shares, triangle tires, etc. in the investment interactive platform have said that the domestic market orders are sufficient, some enterprises on hand orders far more than the existing production capacity, some enterprises overseas half steel tire orders have been restored to the first half of last year, the market recovery signs obvious. Many institutions analysis that the raw material prices fall overlapping with the start rate, tire business profitability repair is expected, corporate profit space is expected to gradually open.
Cost decline in profitability space to be repaired
The production of tires required raw materials, rubber accounts for nearly half, followed by carbon black, steel cord, additives and other materials. Recently, as the price of the main raw materials for tires fell, their costs have also been able to fall, bringing high expectations for industry profit repair.
Zhuo Chuan information tire industry analyst Guo Juan said that the recent price of the main raw materials for tires showed a different range of decline, making tire production cost pressure has been effectively alleviated. Among them, raw materials, the average price of natural rubber in April 11524 yuan (ton price, the same below), down 10.72%; the average price of styrene-butadiene rubber 11605 yuan, down 6.06%; the average price of rebar 4085 yuan, down 20.25%; the average price of carbon black 9227 yuan, down 7.03%. May, China's carbon black market spot average price of 7281 yuan, down 17.06%, compared with the same period last year. The total production cost of a single all-steel tire (12R22.5 paracord, weight selected from 65 kg) fell to about 817 yuan / piece, down 4% YoY, down nearly 12% compared to the same period last year.
At the same time, there is also good shipping costs. With the world's dock congestion continues to ease, port capacity has been raised, shipping prices are expected to stabilize in a reasonable range, favorable to tire exports.
The industry believes that, with the decline in raw materials and transportation costs, tire companies are expected to gradually repair the profit space.
Demand rebound industry boom gradually rise
In the raw material prices decline, cost pressure to ease at the same time, in recent times the tire listed companies disclosed in April production and sales flash report shows that the tire industry production and sales situation also continued high growth trend.
Linglong tire said that the company's tire sales in April this year was 5,815,300, an increase of 31.63% year-on-year; the company's tire sales in the first four months was 22,545,700, an increase of 11.99% year-on-year. Triangle tire production and sales also performed well, since April the company's production capacity is close to full production, the current market sales stability, foreign trade orders are sufficient.
Industry analysis pointed out that this year, with the recovery of exports and domestic demand rebound, the tire business sales are good, the plant start-up rate to maintain a high level, in which the volume of tire exports have a significant repair.
In 2023, the unfavorable factors limiting the development of the tire industry gradually improved, the impact of the epidemic eliminated, the overall economic situation improved, the transport industry gradually recovered, the tire business start-up rate continued to run at a high level.
According to the data of Goldlink, in April, the overall start rate of tire enterprises was near 65.67%, including 69% for all-steel tires, 79% for semi-steel tires and 49% for bias tires. Tire exports also maintain high growth. General Administration of Customs data show that from January to April this year, China's rubber tire exports totaled 2.71 million tons, an increase of 11.8%; the export value of 47.461 billion yuan, an increase of 20.4%.
"At present, the domestic tire industry start rate to maintain a high level, production than the same period last year there was a significant increase, which also confirms from the side of the current tire downstream demand than last year has gradually recovered, tire industry boom gradually into the upward channel." Deppon Securities analysts said.
Responding to the "double reverse" to enhance the globalization of production capacity layout
Despite the recovery of the tire market, Europe and the United States "double anti" tax rate still make the tire industry is under pressure, domestic tire companies have chosen to build plants overseas, to enhance production capacity for globalization layout has become the main path of development of domestic tire companies.
According to statistics, as of the end of 2022, a total of 13 domestic tire production enterprises in overseas set up 16 production bases. Among them, the overseas factories of companies such as Sai Lun Tire and Sen Kirin Tire have become an important source of profit for enterprises.
Industry sources said that the first half of this year, tire companies showed a good recovery momentum, especially the all-steel tire recovery momentum is more robust, demand recovery overlaid with shipping costs and raw material costs down and other favorable factors, is expected to continue to repair the performance of tire companies in the second half of the year.
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