Recently, statistics on major economic indicators for the first four months of the domestic tire industry were released. Tire World Net observed that it is becoming increasingly difficult for Chinese tire companies to make money.
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The year-on-year increase of main indicators of the tire industry in January-April 2016 (unit: %)
Yield increase income drop
The data show that from January to April this year, 41 key member companies of the China Rubber Industry Association Tire Sub-committee had a total output of 1,184.473 million tires, an increase of 5.08% year-on-year.
Among them, the production of radial tires was 108,084,400, an increase of 6.47% year-on-year; the production of all-steel radial tires was 26,203,900, an increase of 3.10% year-on-year; the radialization rate was 91.52%.
From the point of view of tire production alone, the performance of the company seems to be good, but the subsequent sales revenue is surprising.
While maintaining a relatively large increase in output, these companies completed the current value of tire production was 51.722 billion yuan, a year-on-year decrease of 5.43%; realized tire sales revenue 47.196 billion yuan, a year-on-year decrease of 5.31%.
With the increase in production, revenues are declining, which means that the unit price of tire companies is still declining.
In this statistical indicator, there is no profit for tire companies. Tire World Network was informed in its communication with enterprises that since the beginning of this year, the profitability of Chinese tire companies has generally declined.
Increased export prices
As we all know, China's tire industry is highly dependent on foreign trade. Every year, more than 40% of tires rely on foreign trade to digest.
Data show that from January to April, the 41 companies completed export shipments of 49.965 million tires, an increase of 4.02% year-on-year; among them, 46,391,300 export radial tires, an increase of 4.55%.
Although not as pronounced as the increase in output, domestic tire export volumes are still growing.
Corresponding to the number of exports, in the first four months, the delivery value of China's exported tires was 15.576 billion yuan, a significant decrease of 11.52% year-on-year.
“One increase and one decreaseâ€, it is self-evident that the price of Chinese tire exports has dropped significantly.
"Double anti" influence can not be underestimated
Tire World Net learned that while the price of tires could not be raised, the prices of raw materials such as natural rubber, carbon black, and steel cords have shown strong performance.
As the price of natural rubber rebounded in the previous period, and carbon black and steel cords increased prices, the cost pressure on domestic tire companies increased significantly.
In addition, the United States has entered a critical period for the “double counter†investigation of the Waka bus tires, and the seriousness of China’s tire export restrictions cannot be ignored.
Some experts told the Tire World Network: "Compared with last year's semi-steel tires, the impact of all-steel tires on the tire industry in China is certainly much greater."
According to the analysis, in the later period, China’s export volume to US tires may decline due to the “double opposition†of the United States.
On the one hand, the cost is greatly increased. On the other hand, the export is seriously impeded, and the market prospects facing the Chinese tire industry are not optimistic.