Rising demand for raw materials to boost demand for tires

The price increase seems to have become the theme of 2010. From daily consumption of garlic to industrial raw materials, wave after wave of price increases made us lose their eyes. Nowadays, due to the impact of rising prices of natural rubber as the main raw material, the domestic tire industry is brewing the second wave of price increases during the year. According to industry estimates, this wave of price increases for tires may not be settled until around March next year.

Current Status of Key Tire Brands in Rising Prices Not long ago, Continental AG announced that it will increase the prices of summer and season tires for passenger cars and light trucks in the Asia-Pacific replacement market, including German-branded tires. The average price increase for this time is 5%. The new price will be implemented from December 1, 2010. Before the German Continental Group, Hangzhou Zhongce, Fengshen Tire, Triangle Tire and other independent brands also announced price increases, which ranged from 5% to 8%.

In fact, as early as this spring, under the leadership of such first-line brands as Bridgestone, Goodyear, Michelin, etc., the tire industry has completed a 3% to 5% price increase, and this year's wave of the market is It is seen as the second increase in the price of tires during the year. "The current market situation is that the leading brand in the industry led the rise. Independent brands and some low-end brands are following suit," said a tire brand agent in Dongguan. Now the tire industry has clearly formed three camps, with Michelin, Bridgestone, Horse, Goodyear and other brands occupying the first echelon; Kumho, Hankook, and Jiatong are among the second echelon; Chaoyang, the good Domestic tires such as Yun can only rely on low prices to hit the market. The top brands in the sales rankings are even more price-changing this year. “The most exaggerated is Hantai, which has risen 3% a month since August of this year and has risen continuously for four months.”

With regard to the reasons for the collective rise in tire prices, all dealers have consistently aligned the muzzle with the increase in the price of tire raw materials—rubber prices. “The reasons for the high prices of natural rubber are related to speculation, output, etc.” Xiao Jianzhong, service manager of Guangzhou Ditai Auto Parts Co., Ltd., told reporters.

The impact of the increase will continue until March next year. For the tire prices that have continued to rise for a year, Dongguan’s private owners are less responsive. Most car owners interviewed said that the tires are not like gasoline. Even if they heard that they would raise prices, they would not be able to immediately Line up to buy. The head of the Jieli Express Humen store also stated that most private owners are less sensitive to tire prices due to the longer cycle of tire replacement. The person in charge said that if the owner chooses a tire with a unit price of $500, the cost of replacing four tires in 2010 will be at least 200 yuan more than last year. However, a relatively good news is that the reporter asked a number of 4S stores in Dongguan, including GM, Toyota, Honda and other mainstream brands, the price of tire replacement has not yet changed.

Has it lasted for nearly a year and when will it come to an end? “According to the current trend, it is expected that the price of tires will be stable or declining until March next year.” Dongguan Kadimishi tire distributor told reporters that the dealer said that the analysis of the tire price trend in the industry is based on two Judgment, first of all, the rise of natural rubber as a raw material reflects a lagging effect on finished tires. The current market brewing wave price increases are basically the cost pressures that cannot be digested by tire manufacturers in the history of rubber price shocks in September. In addition, after the price of natural rubber was overheated by hot money, Deli’s hot money was gradually withdrawn from the rubber futures market. Now the price of natural rubber in the futures market has begun to show a trend of decline, with tire manufacturers from raw material procurement to finished products. Calculated from the factory's production cycle, during the period from February to March next year, tire prices will stabilize or fall.