Semi-Steel Tire Supply and Demand Stay High in Q3, Likely to Fall in Q4
Snapshot: In Q3, 2023, China’s semi-steel tire market performed well, with high sales both at home and abroad. Thus, the operating rate of the tire industry remained high. In Q4, the overall semi-steel tire market may usher in the sales slack season, so the demand may slow down. Besides, feedstock prices may ramp up, boosting the production cost of tire. Tire producers may show weaker appetites for production, dragging down the output of semi-steel tire.
In Q3, the production and sales of semi-steel tire continued to perform well.
In Q3, 2023, the production and sales of semi-steel tire remained high. Especially, the export market performed well. The export volume of semi-steel tire hit a historical high, underpinning the overall sales volume. Besides, the demand for semi-steel tire recovered in China’s domestic market. Driven by seasonal factors, the replacement tire market continued to perform better, with sales uptick compared with Q2. The demand for OE tire surged by over 14% from Q2, fueled by the favorable passenger vehicle market. Supported by rising sales, tire producers were more active in production. The operating rate and output of semi-steel tire both saw further increases from Q2. In Q3, the output of semi-steel tire reached around 156,986.5 thousand pieces, up 2.43% from Q2.
In Q4, the output of semi-steel tire is expected to trend down.
In Q4, the replacement tire market may usher in the demand slack season. With the weather turning colder, the end demand in China’s replacement tire market is likely to slacken. Besides, merchants have replenished inventory in September, so the stock-up activities may underperform in Q4. Moreover, the export market of semi-steel tire may remain resilient. Yet, curbed by seasonal demand slack season, the overall export volume may slow down, weakening the support for the overall sales. In terms of the OE tire market, boosted by preferential policies for new energy and passenger vehicles, the OE tire market may perform well, failing to prop up the whole sales volume. In Q4, the demand for semi-steel tire may be eased.
Due to the slowdown in market demand, the inventory at tire producers may pile up, subduing the operating rate. Besides, the production cost of semi-steel tire may advance, so the profit is possible to be squeezed. The tire producers may lack positive production sentiment. Therefore, in Q4, the output of semi-steel tire may pare down. Besides, due to expected inventory pressure in November and December, the operating rate at semi-steel tire producers may change in November.
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