Since the beginning of this year, especially after the Spring Festival, the domestic tire market has been rid of the continuing downturn. The production conditions of various companies have begun to improve. After entering March, the production and sales are even more prosperous. The average operating rate of the industry has risen sharply, and some companies have started construction. The rate is even more than 90%. The tire industry has really bid farewell to the harsh winter and entered the spring. For this reason, the reporter conducted an in-depth interview. Most industry insiders believe that the current rebound in the tire market is mainly due to the implementation of the national policy of stimulating domestic demand, the normal replenishment of dealers and market demand have improved, does not mean that the market is fully started and restored.
Cai Weimin, secretary general of the tire division of the China Rubber Industry Association, explained that in the first quarter of this year, compared with the fourth quarter of last year, the production and sales of tires have indeed improved, and the company's inventory has also declined. According to the understanding of the start-up situation of the 10 tire companies, there are 2 operating rates of 80% to 90% and 8 full-load production. A steel cord company reported that their orders have started to increase, and some companies have added additional orders. However, as early as January, the operating rate of most domestic synthetic rubber companies has recovered to about 80%. Cai Weimin analyzed that the start-up of the tire market was partly due to the recovery in demand driven by domestic demand. On the other hand, due to the fact that dealers’ inventory consumption was almost the same, the market price was low and there was conscious replenishment.
Shen Jinrong, Chairman of the Tire Branch and chairman of Hangzhou Zhongce Rubber Co., Ltd. believes that the recovery of this round of market conditions is due to three reasons. First, the country's implementation of the domestic demand policy has undoubtedly stimulated the tire market to pick up. A batch of infrastructure construction projects started gradually, which objectively led to a rebound in tire demand. This can also be seen from the current market hot tire varieties. At present, there are two types of tires that are very popular: First, heavy construction tires and heavy-duty tires used in construction machinery; second, due to the pulling of agricultural machinery to the countryside, domestic light trucks, mini-vehicles, and agricultural vehicle markets are activated to provide tires for these models. Good for sale. But other than that, heavy trucks are not easy to sell. Second, there are plenty of shortfalls in retail channels. Since the fourth quarter of last year, with the diving of rubber prices, dealers have been controlling the purchase of tires because of fears of significant price cuts for tires, resulting in very small inventory of tires in retail channels. After the Spring Festival, because the situation is basically clear, rubber prices have begun to rebound sharply. The panic of dealers has been greatly eased, and dealers and tire manufacturers have consumed almost the same amount of inventory. To do business, they need replenishment, prompting retail channels to begin to cover their positions. . Finally, many vehicles have been shut down since the fourth quarter of last year, and a large number of such replacement tires have not been replaced. With the gradual launch of these vehicles, there has been a demand for batch replacement of tires. The above factors have led to the current "reinforcement market" in the tire market.
However, Shen Jinrong also pointed out that there are still many uncertainties in the domestic tire market. First, China’s tires are heavily dependent on exports. Exports account for about 45% of total output, and value accounts for about 40% (because Chinese export tires are mainly car tires, with low value). Since the beginning of the fourth quarter of last year, due to the impact of the global financial crisis, China's tire exports have fallen sharply, and the production capacity of tire companies has been excessive, which directly threatens the normal production and operation of tire companies. According to statistics from the Tire Branch, physical shipments of tire exports by member companies for the first time last year showed a negative growth of -1.37%, which was obviously affected by the sharp drop in global demand. Second, the tire industry also encountered problems not found in other industries, such as anti-dumping. Last year, the United States imposed anti-dumping measures on non-road tires in China with a tax rate as high as 210%. Brazil, India, and other countries also imposed anti-dumping measures on Chinese tires. Third, the turmoil in the international financial market has intensified, and the sensitivity to tire export prices has become prominent. As the depreciation rate of the currencies such as the ruble, euro, pound sterling, Australian dollar, and won is between 20% and 35%, the competitiveness of tires in the corresponding countries in the international market has increased dramatically, which has exerted tremendous pressure on China's tire exports. China's tire companies are constrained by production costs, and there is no room for price adjustment to maintain the market.
Cao Chaoyang, chairman of Fengshen Tire Co., Ltd., has the same opinion. He said that the market is optimistic in the short term, but the future market is not clear. "After the Spring Festival, I went to Southeast Asia to study. The foreign rubber market was not active. It showed that the international market did not start. The international market has not improved. The pressure will continue to be transmitted back to the country. Now is the domestic domestic demand to pull big, taking advantage of the market, but the export market Blocking will put pressure on the domestic market where production capacity is already relatively surplus, and competition will become more intense."
Zou Yongzhi, general manager of Huanan Tire & Rubber Co., Ltd. also believes that although the domestic market is gradually getting better, foreign markets have not been affected by the financial crisis, and export markets, especially high-performance tires, have not been able to come. Their company is a typical export-oriented enterprise. In the past, 80% of its products were exported, and most of them were high-performance passenger car tires. Although the domestic market share has gradually increased since last year, it needs a process. Therefore, the pressure on companies is still high. He analyzed that the start of the current market is mainly due to the fact that the dealers have no goods at hand, and the phenomenon of replenishment by everybody may cause the market to have another downturn.
Shen Jinrong specifically reminded that the current domestic investment structure is divided into two major categories, one major category is government investment, including large-scale infrastructure, and the other is private investment. The two kinds of investment are currently showing a hot and cold one. The tire industry's current structure of industrial recovery is consistent with the investment structure, and it is also hot and cold. At present, the auto industry is best to sell dump trucks. The most difficult to sell are flatbeds and trailers. There is little sign of recovery. Port machinery is also quite unsatisfactory. Similarly, tires are also good for large engineering tires, and other tires are relatively poor.
As for the sustainability of this round of the market, Shen Jinrong thinks it is difficult to draw conclusions. He believes that according to the current operating rate, the Chinese tire industry basically has no increment, it is only equivalent to the recovery in the fourth quarter of last year, unlike the rapid growth since 2002. "If there is growth, I think it will take at least four quarters," Shen Jinrong said.
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