Semi-Steel Tire Sales See Y-O-Y Growth in Q1
Snapshot: In Q1, rising feedstock prices posed pressure on tire costs, greatly underpinning the price of semi-steel tire. However, in Q1, tire enterprises and agents mainly guaranteed sales and sold well in early 2024. The price of semi-steel tire mainly remained stable. In Q2, bolstered by a robust export market, the price of semi-steel tire may level up.
China’s semi-steel tire market saw upward sales and stable prices in Q1.
Due to constant rises in feedstock prices, tire enterprises faced high cost pressure. However, in order to finish sales tasks, especially after the Spring Festival, enterprises held purchasing meetings intensively, so the semi-steel tire price remained largely stable.
Demand for semi-steel tire performed well from early 2024.
In 2024, sales of semi-steel tire performed well both at home and abroad and went up Y-O-Y, especially in the export market. Against the overseas supply gap, the export volume of semi-steel tire under HS code 40111000 propped up the overall sales greatly, and even the foreign market faced short supply.
In 2024, the export volume of semi-steel tire under HS code 40111000 may perform well. From January to February 2024, the export volume rallied by 16.64% Y-O-Y, setting a new record high on high base last year. Firstly, favorable exchange rates and bumper profits pushed tire enterprises to export actively. Secondly, affected by geopolitics, the demand for China’s tire in Europe ramped up. Thirdly, China was actively exploring other markets such as the Middle East and Africa. The export volume of semi-steel tire under HS code 40111000 remained high, driving up the overall sales.
In Q1, 2024, China’s semi-steel tire export volume remained high, and the domestic sales market also performed well both in replacement tire and OE tire markets. In 2024, China’s economy will continue to resume growth. According to data released by the National Bureau of Statistics, China’s total GDP reached around 29.63 trillion RMB, up 5.3% Y-O-Y. Boosted by the constant rise of China’s economy, the domestic consumption level moved up somewhat. Consumers’ travels performed well, driving up the demand for replacement tire. The demand for OE tire was mainly booted by the output of passenger vehicle. In 2024, the new energy vehicle market still remained robust. In Q1, 2024, its output reached 2,115 thousand, up 28.2% Y-O-Y. Promoted by new energy vehicle, the output of passenger vehicle hit a new high and rose by 6.6% Y-O-Y, pushing up the demand for OE tire.
Feedstock prices pushed up the cost, pressuring on tire production.
In terms of the weight ratio of semi-steel tire, synthetic rubber accounts for the largest proportion of 26.95%, followed by carbon black of 26.74% share. The weight ratio of natural rubber ranked third and reached 22.53%. That of other chemical auxiliary materials took up around 7.85% of the total. Thus, price changes of natural rubber, synthetic rubber and carbon black have a greater impact on the cost of semi-steel tire.
From January 2024, prices of various feedstock leveled up constantly. Prices of natural rubber, synthetic rubber, carbon black, etc. climbed to a high level. As of March 2024, the monthly average prices of natural rubber, PBR, SBR and carbon black rose by 12.56%, 14.92%, 13.35%, and 9.78% respectively from December 2023. The rise in feedstock price pulled up the tire price under high cost pressure.
As feedstock prices continued to climb, the production cost of tire surged to a relatively high level. According to SCI, in March, the production cost of a single semi-steel tire climbed to RMB 161.48/piece (weight is selected as 10kg), up 6.24 percentage points from December 2023 and exceeding the high level in September 2023. Driven by rising feedstock prices, semi-steel tire enterprises faced high cost pressure. However, in order to ensure sales and further seize market share, tire enterprises choose to bear the pressure brought by rising feedstock prices themselves, and the tire price mainly remained stable.
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