After the United States to China tires special security case, the pace of domestic tire industry restructuring has had to speed up. The development of China's rubber industry is facing adjustments, transformations, and restructurings to promote China's rubber industry to emerge from adversity and develop steadily and healthily. It is expected that the integration of the tire industry will begin.
The domestic tire industry is in a difficult business. Tire industry profits will continue to decline in January 2010. Statistics show that in the fourth quarter of 2009, the profits of domestic tire companies fell sharply, and some companies’ profit before tax fell more than 20% month-on-month. The decline in profits is mainly caused by two factors. First, the soaring prices of raw materials have led to soaring production costs. Second, companies cannot fully absorb cost pressures through price increases. According to the average level, the cost of ordinary car tires will increase by approximately 15%, and the cost of trucks and engineering tires will increase by 25% to 30%.
Since the fourth quarter of 2009, natural rubber has once approached historical highs, rising by about 960 U.S. dollars per ton, which is equal to 45%; butadiene rubber has increased by 39% per ton; SBR has increased by 37% per ton. On the tires, the increase in natural rubber, butadiene rubber, and styrene-butadiene rubber prices are approximately 6.56 yuan, 10.26 yuan, and 8.55 yuan, respectively, which means that the fixed cost per passenger car tire will increase by approximately 25.36 yuan, that is, the cost will increase year-on-year. 17% (The original three types of raw materials cost 170 yuan per tire). In foreign countries, raw material prices have risen sharply and have reached an unacceptable level. Heavy rains and floods in November severely affected the rubber production in Thailand, Indonesia, Malaysia and India, and the production of these major rubber producing countries significantly decreased. Concerns from market participants coupled with strong demand for rubber prices have gradually increased. In mid-January, the price of rubber has exceeded US$3/kg, which is close to the historical peak of 3.25 yuan/kg. In addition to the continuous rising trend of major raw materials, transportation costs are also rising.
The global tire market is squeezing up the price with the economy entering a price increase cycle. Tire demand has already bottomed out. In 2009, demand for replacement tires in Europe and the United States increased by 6.4% and 9.7%. In this context, tire manufacturers have deployed a new round of expansion plans. It is expected that the tire price increase has just begun. Following the first wave of domestic tire prices in January, the domestic tire industry will raise its price twice before and after the Spring Festival. However, the price increase does not guarantee that the profitability of tire companies will return to highs. The domestic tire industry is a highly competitive industry. Most of the domestic companies do not have the right to set prices. As a result, they have not dared to substantially increase prices, and therefore cannot fully absorb the pressure brought about by rising costs.
Running Shoes,Red Running Shoes,Good Running Shoes,Kids Running Shoes
Shangqiu JIAYING SHOES CO.,LTD. , https://www.jiayingshoe.com