Semi-steel Tire: Firm Export Market and Low Inventory Pressure
In 2024, the holiday duration of semi-steel tire enterprises was shorter due to the Dragon Boat Festival, mainly due to favorable market sales. In 2024, China’s domestic and export markets of semi-steel tire performed well, largely propping up the overall sales. Semi-steel tire enterprises faced a supply crunch, and the inventory slid to a relatively low level. Amid low inventory, they showed high enthusiasm for production, so the holiday duration was shorter.
China’s semi-steel tire export market performed well. Due to geopolitics in Europe, the demand for China’s tire remained robust. Coupled with the constant shutdown of overseas tire units, the overall operating rate was insufficient, so the demand for China’s tire improved. In 2024, China’s semi-steel tire exports had achieved passable growth at the high base last year. In China’s market, traditional Chinese fuel vehicles have been constantly converted to new energy vehicles in recent years.
According to CPCA, in H1 April 2024, China’s new energy vehicle penetration rate reached 50.39%. Driven by new energy vehicles, from January to May 2024, the output of China’s passenger vehicles trended up Y-O-Y. Besides, in 2024, China’s economy recovered. According to NBS, from January to May 2024, apart from January, China’s PMI index was above 50. Boosted by favorable China’s economy, residents’ business activities and outing tourism ramped up. Thus, the demand for replacement tire moved up Y-O-Y.
Due to the prosperity of the semi-steel tire market from January to May 2024, sales in domestic and export markets grew Y-O-Y. Boosted by the demand, China’s semi-steel tire market faced tight supply. From January to April 2024, the inventory at semi-steel tire enterprises continued to slide, and the inventory days dropped to 29 days in April, which was lower than the same period last year. The tire enterprises were out of stock.
According to SCI, in May, the inventory at semi-steel tire enterprises piled up. The main reason was that the ocean freight picked up, so the export of semi-steel tire slowed down, alleviating the tight supply to some extent. Besides, the replacement tire market ushered in the demand slack season, so end demand underperformed. Sales of replacement tire cooled down, and the inventory at tire enterprises remained high. Despite a rise in inventory in May, the overall inventory level was still at a relatively low level. Tire enterprises had strong intentions in production, so most semi-steel tire enterprises maintained normal production during the Dragon Boat Festival.
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