2023 China Semi-Steel Tire Market to Recover
Snapshot: Since 2023, the tire enterprise and market have seen positive cues, with fairish production and sales in Q1. Meanwhile, tire exports continue to stay high, pulling up overall sales. It is envisaged that China’s semi-steel tire market may recover overall in 2023, and the output may ratchet up Y-O-Y.
From January to May, semi-steel tire enterprises operated well.
After the Spring Festival in 2023, tire enterprises were active in resuming production, and the operating rate was much higher Y-O-Y. Meanwhile, the operating rate at tire enterprises remained high in the post-holiday period. From January to May 2023, the output of semi-steel tire ramped up notably Y-O-Y.
In 2023, tire enterprises resumed production normally after Spring Festival. The operating rate rallied, in tandem with employees returning to work. More specifically, semi-steel tire enterprises resumed the operating rate to 72.02% only in three weeks, up 16.66% Y-O-Y or even up 3.92% from the same period of 2019. Yet, it was still lower from the same period in 2021 when the government advocated staying put during Spring Festival. In 2023, the time returning to work was slightly delayed, as many employees didn’t go back home for many years.
After the Spring Festival, the operating rate at semi-steel tire enterprises remained in an upswing, which was much higher than that in 2022 and historical 10-year level. Propped up by a high operating rate, the output of semi-steel tire reached 17,735.97kt, up 15.68% Y-O-Y.
China’s domestic and export markets witnessed decent sales.
From January to May 2023, the operating rate of China’s semi-steel tire sector was high Y-O-Y. Firstly, the replenishment of replacement tire was insufficient ahead of the holiday. Thereafter, the tire market revived somewhat. Traders were active in stocking up, underpinning the operating rate greatly on circulated inventory. Secondly, backed by a robust export market, sales leveled up, boosting the overall operating rate.
Ahead of the Spring Festival, stock-up activities were deficient. Thereafter, order-placing meetings were held among regions. Sales volume at agents was favorable, up M-O-M and Y-O-Y. From March to April, with the replenishment ending, sales volume at agents slowed down, which was still higher Y-O-Y. From January to April, the replacement tire market kept passable, pushing up the sales.
Besides, the tire export market performed well. From January to April, the cumulative export volume of semi-steel tire was 864.48kt, up 17.02% Y-O-Y. Especially in March, the export volume of semi-steel tire reached 237.39kt, up 23.38% Y-O-Y. It notched a historical high, which was basically the same as the level in July 2022. Thus, fueled by that, the overall sales extended gains Y-O-Y.
In 2023, the output of the semi-steel tire may ratchet up.
In 2023, the growth of the global economy may slow down, while that of China’s economy may see recovery growth. The International Monetary Fund (IMF) released its latest World Economic Outlook Report on April 11. It is predicted that China’s GDP growth rate will increase from 3.2% in 2022 to 5.2% in 2023. The customer travels covering car travels may ramp up. On the whole, in 2023, the demand for replacement tire may register growth in the semi-steel tire market.
Besides, according to SCI’s study of tire enterprises, in 2022, sales in the replacement tire market saw a sharp dip. Thus, the expected Y-O-Y increase may be 8%-15% when setting the sales goal in 2023. Several enterprises even pursue the sales level in 2021, aiming to reach a 20% Y-O-Y rise.
On the whole, in 2023, the export market is likely to be fairish. The demand for replacement tire is poised to ramp up. Yet, the recovery of the replacement tire market in 2022 still has a certain gap compared with 2021, so the semi-steel tire output in 2023 may also struggle to exceed the output in 2019.
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