In December, tire companies set off the third round of price increases since the end of August this year. On December 1 alone, 17 tire companies announced price increases. However, behind the price increase of tire companies is a dilemma: While the rapid rise in commodity prices pushes up corporate costs, the continued decline in sales in the heavy truck market has cast a shadow over the supporting market for tire companies.
In an interview with the "Securities Daily" reporter, IPG China Chief Economist Bai Wenxi said that tire companies’ price increases were due to supply shortages caused by cost promotion and insufficient production capacity, which in turn pushed up prices. Continue until the first quarter of next year.
As the prices of commodities, raw materials, energy, etc. have risen sharply, tire companies’ product costs have increased. Therefore, only one round of price increases can be used to maintain profits. However, according to industry observations, the continuous price increase of tire companies has not received simultaneous feedback in the market.
Regional price differences still exist due to differences in channel sources and market operations in various regions. Zhuo Chuang Information analyst Jiang Yun said, "In addition, the domestic market's terminal consumption capacity in November showed a certain degree of weakness under the influence of regional transportation restrictions, weakened rigid demand, and high freight rates, which created greater resistance to the implementation of price increases."
Qi Haishen, president of Beijing Teyineng Sunshine New Energy, said that tire manufacturers’ price increases are mainly affected by national energy consumption dual control, environmental protection supervision, power curtailment measures and other control factors. The increase in raw material costs is superimposed on the demand side and has little to do with the demand side. Whether it can continue depends on whether downstream terminal market demand can pick up.
"Leaks in the house are even raining overnight." On the one hand, the tire industry has undertaken the cost pressure of rising raw materials from the upstream; on the other hand, the downstream demand side has not improved.
According to the latest industry data, in November this year, the total sales volume of my country's heavy truck market was about 48,000 vehicles (invoicing caliber), a decrease of 10% from the previous month and 65% year-on-year; A decline of 11.6%, the heavy truck market sales have been declining for 7 consecutive months.
The sales of heavy trucks are related to the supporting sales of all-steel tires. Some industry sources pointed out that in July this year, the implementation of the national six standards for heavy trucks overdrafted the industry's demand in the second half of the year to a certain extent, and the sharp decline in the sales of heavy trucks seriously affected the supporting market for tire companies. . Although tire companies are forced to raise prices under the pressure of continuous price increases of raw materials, the sluggish market demand casts a shadow over the performance of tire companies.
In this regard, Zhuo Chuang Information analyst Jiang Yun believes that entering December, due to policy influences and insufficient demand as expected, commercial vehicle production capacity will be released more cautiously, and tire matching will continue to operate at a low level.
However, according to CITIC Securities' forecasts, the sales of heavy trucks will reach 1.4 million in 2021. Although facing greater downward pressure in the second half of the year, sales for the whole year are still expected to remain at a relatively high level. At the same time, it is worth noting that due to the gradual relaxation of passenger car chip supply, it will promote the release of passenger car production capacity, and the corresponding tire matching demand will also increase.
During the interview, Qi Haishen told the "Securities Daily" reporter, "The demonstration application of hydrogen energy vehicles in urban agglomerations has been launched, and hydrogen energy commercial vehicles, especially the hydrogen energy heavy truck industry, will usher in a'replacement upgrade', and the boom will increase rapidly. "
"In fact, what we are worried about is not the upstream tire companies raising prices, but the fear of lowering prices at the next-door tire shop!" said a tire retailer in an auto parts city in Shandong.
The above-mentioned retailer stated that for practitioners in the tire replacement market, consumers are not sensitive to price changes due to the long tire replacement demand cycle. The resistance of retailers to follow tire manufacturers’ price increases is not large, but there is Low-price competition is extremely detrimental to the development of the industry.
At the same time, the reporter also noticed that the entire tire industry is in an "eventful period." According to incomplete statistics, a total of 30 rubber tire companies will go bankrupt/auction in 2021. In addition, the number of bankrupt companies in 2019 and 2020 will both exceed 30.
The reason is that in terms of policies, many local governments represented by Shandong Province have issued relevant policies to eliminate outdated production capacity, and the industrial upgrading of the tire industry is imminent. At the same time, many small and medium tire companies blindly expand production, leading to a break in the capital chain and may face bankruptcy.
While a large number of small tire factories are closing, the domestic tire industry's leading companies are rapidly expanding their production capacity, and the industry concentration has been further improved. Qi Haishen told the "Securities Daily" reporter that the tire industry is now developing in the direction of refined production and energy-saving and consumption-reducing processing. With the increasing national environmental protection supervision efforts, low-energy, low-polluting large-scale leading enterprises It tends to become bigger and bigger, the industry concentration is enhanced, and the product profit rate can be guaranteed; while some small and medium-sized enterprises squeeze each other obviously, small tire companies will basically be forced out.
Disclaimer: The picture materials and articles on this platform come from the Internet, so the copyright belongs to the original author. If you infringe your copyright and interests, please contact us. We apologize and delete it quickly. Source of the article: CITIC Securities
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