Financial Associated Press, June 2 (Reporter Xiao Lianghua) The sluggish tire industry has ushered in some positive signs. Stimulated by policies such as resumption of work and stable growth in Shanghai, the tire industry is expected to recover strongly.The Financial Associated Press has learned from many sources that although the tire industry is showing signs of improvement, it is "too early to be optimistic". At present, domestic demand is still relatively weak, and the cost pressure of high inventory and rising raw materials is still surrounding tire companies.
A relevant person in charge of a tire in Shandong told a reporter from the Financial Associated Press, "At present, it is still difficult for enterprises to ship goods, and the recent intensive policy of stable growth is expected to improve the demand for the industry "at least until the second half of the year."
In addition, Jiang Yun, an analyst in the tire industry of Zhuochuang Information, also told the Financial Associated Press that the operating rate of domestic tire companies in May increased slightly from April, but it was still much lower than the same period last year.At present, the inventory of tires is still at a high level, and tire companies are not running smoothly.She said: "In the second quarter, the raw material costs of tire companies increased slightly from the previous quarter, but downstream demand was weak, and manufacturers were still struggling between raising prices and destocking."
Weak demand, high inventories
News such as the policy of stabilizing growth and the resumption of work and production in Shanghai have made the market have strong expectations for the economic improvement in the third quarter, but the actual demand recovery is still slow.The aforementioned person in charge of a tire in Shandong told the Financial Associated Press that the current downstream demand is still weak, and the demand for all-steel tires is even weaker.However, overseas demand is relatively strong, and the company's overseas orders are relatively sufficient.
According to statistics from Zhuochuang Information, the operating rate of all-steel tires in May 2022 was 54%, compared with 61% in the same period last year; the operating rate of semi-steel tires was 57%, which was also lower than last year."This time period is usually the off-season. The low operating rate in the same period last year was due to the decline from the high level. This year, it has been relatively low." Jiang Yun said.
All-steel tires are mainly supplied to the matching and replacement markets for heavy trucks.In May this year, my country's heavy-duty truck market sold about 47,000 units, a slight increase of 7% month-on-month and a year-on-year decrease of 71%. The heavy-duty truck market has declined for the thirteenth consecutive month since May last year.From January to May 2022, the cumulative sales of the heavy truck market was 323,000 units, a decrease of 64% or 564,000 units from the 887,000 units in the same period of the previous year.
Jiang Yun introduced that domestic logistics and transportation are obviously not smooth under the epidemic, which has a great impact on the demand for tire replacement.From the data of road freight turnover, it can be seen that the freight performance in March and April was not good, and the transportation situation in May improved month-on-month, but it was still low year-on-year.
The overall destocking of explicit inventories across the country is slow, the inventory of finished tires is high, and the logistics stagnation caused by the epidemic has not been able to be destocked seasonally.According to QinRex data, in the last week of May, the inventory turnover days of China's all-steel tires were 44 days, an increase of 1 day from the previous month, and the inventory turnover days of semi-steel tires was 43 days, which was the same as last week, and both were at a year-on-year high.
"The situation of enterprises accumulating warehouses is still relatively obvious." Jiang Yun said that high inventory suppresses the operating rate. For tire companies, destocking needs to reduce prices, but in the second quarter as of the end of May, the cost of raw materials did not drop, and even appeared A small increase, under cost pressure, the product needs to increase in price.Therefore, tire companies are in a dilemma.
It will take time to reverse
The State Council recently issued a stabilizing economic policy to reduce the purchase tax of some passenger vehicles by 60 billion yuan in stages, and at the same time, all parts of the country have introduced relevant policies to support automobile consumption.Some analysts believe that it is expected that with the implementation of the automobile consumption promotion policy and the gradual easing of the epidemic, the domestic tire industry demand is expected to rebound rapidly.
The person in charge of the aforementioned tire company told the Financial Associated Press that domestic auto consumption and infrastructure recovery are expected to gradually pick up, and the industry has also seen positive factors, but it has not been reflected in the market for the time being."It's not that fast, and infrastructure needs to be reflected in various operating data, at least until the second half of the year," he said.
In addition, sea freight has loosened, raw material prices are no longer in a unilateral upward trend, and tire companies' performance margins have continued to recover.
Since mid-to-late February 2022, the fluctuations of the Southeast Asia freight index and the freight index of various CCFI routes have decreased, the container throughput of U.S. ports has increased, port congestion has gradually eased, sea freight has dropped significantly, and the shipping pressure on tire exports has gradually eased.
Natural rubber, synthetic rubber, carbon black and other raw materials account for more than 70% of the tire cost. Since 2022, the price of raw materials will be stable, which will help ease the cost pressure of tire companies."As long as it is not a unilateral increase, the company's cost pressure can be lighter." The person in charge of the aforementioned tire company said.
Jiang Yun said that under the condition that tire construction is not good and raw material prices are stable, companies are cautious in purchasing goods.At present, the inventory of raw materials of tire enterprises is relatively low.
Judging from the current export data, this year's tire exports continued last year's strength.According to customs data, China's tire export volume in April 2022 was 561,600 tons, an increase of 11.99% year-on-year.Among them, the export volume of passenger car tires was 181,900 tons, a year-on-year decrease of 0.86%; the export volume of truck and bus tires was 358,100 tons, a year-on-year increase of 22.09%.
To this end, tire companies are stepping up efforts to meet overseas demand.The person in charge of the above-mentioned tire companies in Shandong told the Cailian Press that in order to expand sales, the company is working hard to expand the breadth and depth of overseas markets and strive to export more goods.
