Tire Price to Stabilize in Oct 2022
Tire prices were mostly stable in September.
In September, most all-steel tire enterprises did not adjust their ex-works prices, but promotions and order-placing meetings were seen. The overall trading transaction remain average in September. In addition, the price spread in different regions widened due to different price policies and sales strategies, and the market prices also varied.
Feedstock costs moved sideways in September.
The production cost of all-steel tire (12R22.5, clockwise, 65kg) was RMB 882.4/piece in September, down 0.93% M-O-M and up 0.32% Y-O-Y. Therein, the monthly average price of natural rubber went down from August. As of September 28, the monthly average price of SCRWF in Shanghai was RMB 11,915/mt, down 0.77% M-O-M, and the monthly average price of STR20 mixed rubber in Shandong was RMB 10,861/mt, down 6.54% M-O-M. Synthetic rubber prices fluctuated within a narrow range in September. The monthly average price of ESBR 1502 in North China was RMB 11,670/mt, down 0.41% M-O-M and down 6.96% Y-O-Y, and the monthly average price of HCBR 9000 in North China was RMB 12,481.58/mt, up 0.53% M-O-M and down 6.05% Y-O-Y.
Distributors controlled inventory in September.
It was learned that distributors controlled inventory, and the overall inventory inched down. Most distributors conducted just-needed procurement.
Tire prices are predicted to be stable in October.
The feedstock rubber prices are predicted to fluctuate within a narrow range in October, while carbon black prices will probably go up. Therefore, tire costs are likely to rise. However, tire production is affected by China’s National Day holiday, so the procurement of feedstock is projected to be small, restraining the increment in costs to some extent.
The earlier drops in feedstock prices lead to a decrease in tire production costs, but costs are likely to rebound in October, so the decrease in tire prices is predicted to be alleviated. As for the increase in tire prices, the implementation of price increase policies will be hindered by the limited recovery of China’s tire market and distributors’ bearish sentiment toward sales. Thus, tire prices are predicted to remain stable in October on the whole.
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