March tire prices high merchants began to hesitate

After the price of rubber raw materials rose in March, the cost of tires continued to be supported. The news of tire factory price hikes continued, and the increase further widened. The news that prices of well-known foreign tire brands increased significantly.
Tire prices further expanded Tire prices further expanded

Operating rate

The data shows that in 2016, the total production of automobile tires in China was about 610 million, an increase of 7.9% year-on-year. Among them, there were 565 million radial tires, an increase of 9.7%, 45 million skewed tires, a drop of 10%, and a meridional rate of 92.6%. In the production of radial tires, there were 121 million all-steel tires, an increase of 10%, and 444 million semi-steel tires, an increase of 9.6%. The country's rubber consumption was 9.3 million tons, including 4.9 million tons of natural rubber, an increase of about 5%; synthetic rubber was 4.4 million tons, an increase of about 9%.

Some companies increased their prices by 15% in February, and the tire brand prices in foreign markets kept rising. However, the follow-up of the demand is still slow, the market atmosphere of the terminal market has not significantly improved, and production enthusiasm has been inhibited. At present, tire companies have little pressure on their inventory. However, the financial pressure on small and medium sized tire factories is relatively large. Some manufacturers are affected by the poor turnover of funds and affect the start of construction. In February, the overall operating rate of China's domestic tires increased to 59%, the operating rate of all-steel tires was approximately 62%, and the operating rate of semi-steel tires was 60%.

Enterprise orders

In mid-February, the news of tire factory price hikes continued, the gains continued to expand, and the news of the price increase of well-known foreign tire brands increased significantly.

Stimulated by the increase in prices, tire agents are more active in picking up goods, and the tire factory shipments are relatively smooth. Tire stocks in the market are gradually shifted downstream. As of mid-March, this momentum began to fluctuate.

Raw material procurement cycle

As of March, spurred by the news of tire prices, tire factory shipments are still acceptable, wholesalers across the country, retail stores are actively purchasing. At present, the prices of raw materials such as rubber and auxiliaries are still at a high level, and there are restrictions on the procurement of raw materials for small and medium sized tire factories.

Market Forecast

Although the implementation of the current price increase policy has gradually increased, there is still a spread between the current price increase of tires and the increase in raw materials, so the profit of tire manufacturers is still facing no small pressure. Tire dealers, due to their large inventory, gradually reduced their inventory due to capital pressure, and the market circulation speed slowed down.

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