On December 12, 2022, a new notice of price increase was added to the tire market. Sailun Tire announced that it will raise the price of its TBR products by 2% - 3% from December 15, 2022. The reason for the increase is the rising price of raw materials and the rising operating costs.
On the same day, Zhejiang Baokang Hub Co., Ltd. also issued a notice of price increase. Since the issuance of the notice, the price of each Baokang wheel brand product has been increased by 20 yuan. The reason is also related to the cost of raw materials.
The price adjustment of 20 yuan each is not a small expense for dealers and wholesalers who stock up in large quantities. However, in the tire market, what is not going up in December?
Who hoards goods when prices rise?
For the unstoppable price rise, although most tire stores are shouting, this does not mean that anyone can really keep their heads up - after all, with the price of raw materials such as natural rubber returning to more than 13 million per ton, the trend of tire price rise has been unable to escape.
Although no wholesaler knows clearly that he has started to stock up at the end of the year, after entering the last ten days of November from the tire factory, the operating rate has remained above 60% for several consecutive weeks. Does this mean that tire dealers are secretly stocking up? However, from the institutional data, it seems that this inference is not valid. At present, the circulation time of semi steel tire and all steel tire has exceeded 48 days, which means that although the price rise effect has indeed stimulated the hoarding, it has not played a key role in increasing the operating rate.
In fact, if we consider the operating rate in the third quarter comprehensively, we will find that the increase of operating rate in December was partly affected by the delay of order delivery in November. At the beginning of November, we learned that some Dongying tire factories had completely stopped working, so the current tires are mostly digesting the orders that have not been delivered before. Although the prospect is not optimistic, many tire factories still entered the mode of "six guarantees for seven".
The tire factory entered the mode of "six guarantees for seven"
From the perspective of capacity release, the operating rate of domestic tire enterprises has been maintained at more than 60% for consecutive weeks due to the continuous resumption of business in downstream markets and the continuous increase of overseas orders, even in a large and messy tire market. In December, the order scheduling of tire factories began to be more and more full, and the operating rate of more than 60% was rare this year.
Although not as good as the same period of previous years (really not as good as the same period of 2021), it has been the best level since February. According to the statistics of relevant institutions, in the week of December 8, 2022, the starting load of all steel tires of sample tire enterprises in Shandong was 60.01%, basically equal to the second half of November; The operating rate of semi steel tires continued to rise, reaching 66.43%, up 2.66% year on year and 1.94% month on month, maintaining the trend of a stronger operating rate of semi steel tires in the second half of the year.
When will this trend of strength last until 2023? At present, we have not got a clear answer.
Do you worry about selling tyres?
With the implementation of Article 20 and Article 10, tire stores began to resume production, but their business has been sparse. For no other reason, the logistics transportation has not yet received a clear upward turning signal. From the end of November to the beginning of December, we can still see a lot of complaints about the slow logistics transportation on many platforms. Influenced by many factors, many transportation companies still have overstock problems, leading to the logistics cycle has not returned to the previous level, affecting the tire mileage and replacement cycle.
However, with the arrival of December 9, the logistics in some regions began to deliver goods normally. After the logistics improved, the demand for tire replacement increased. In addition, the passenger transport market in some regions has turned better, and the spring of tire stores is coming.
Disclaimer: The image materials and articles of this platform are from the network, so the copyright belongs to the original author. If it infringes your copyright and interests, please contact us, and we apologize and delete them quickly. Source: Tire Business
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