Aug All-Steel Tire Supply and Demand Dwindled
Snapshot: In August, China’s all-steel tire industry both faced dull supply and demand. Tire enterprises continued to cut the operating rate, and the demand still underperformed amid an insipid trading atmosphere.
In August, supply and inventory of all-steel tire saw declines M-O-M.
China All-steel Tire Supply Change
In August, China’s all-steel tire supply showed an M-O-M decline, and the overall industry was still in the de-stocking stage. 1. most tire enterprises continued to run at stable loads. Yet, in early August, several enterprises halted production and took maintenance. The longest shutdown duration was nearly half a month, dragging down the overall operating rate. 2. In some regions where production is concentrated, peak-shaving production was carried out, and seasonally low production persisted. 3. Tire enterprises continued de-stocking on the backdrop of weak demand stimulus. 4. It was heard that export orders went lower, weighing on production.
In August, sales of all-steel tire leveled down M-O-M.
Aug All-steel Tire Demand Change
In August, China’s all-steel tire market traded steadily amid a decent atmosphere. Agents actively promoted market transactions, but the replenishment sentiment was still relatively cautious. Besides, in August, there was a regional difference in the overall sales performance of all-steel tire in the domestic market. Sales in the northern region remained relatively stable, but those in the southern region underperformed. According to sources, the inventory level at agents inched down. Inventory slowed down amid cautious sentiment. Yet, the current inventory was still at a high level. Meanwhile, the commercial vehicle market ushered in the traditional production off-season, so production went lower M-O-M, but the Y-O-Y gap was still large.
After the continuous high growth of exports, China’s all-steel tire export market was still under pressure. In July, due to lower marine freight, the first cutdown in export price and insufficient production in foreign countries, the export volume of the all-steel tire in China remained robust. However, in August, the export volume of the all-steel tire in China may ebb M-O-M due to high inventory in foreign countries and a dull domestic consumption environment.
In September, supply pressure will still exist, and an increment in demand may be minor.
Supply: In September, SCI reckons that the increase in operating rate will be under pressure despite in traditional demand peak season. 1. The production conditions will be improved, and seasonal production releases will be seen in September, but the Y-O-Y gap will be wide. 2. Sales in the OE tire market may ramp up. Besides, the export market is expected to make up for orders in stages, so all-steel tire production is likely to go up. On the whole, the current operating rate is relatively low, and the effect of destocking in the early stage is showing. Thus, the market supply guarantee may be strengthened.
Demand: In September, the sales conditions are expected to improve. the prosperity of logistics and transportation and the recovery of outdoor engineering operations such as infrastructure will boost the demand for the replacement tire. As seen from the OE tire market, the traditional production off-season of vehicle enterprises has ended, and it will usher in the vehicle production release period. Thus, the demand for OE tire may remain in an uptrend. Yet, considering that the production base of commercial vehicle is still difficult to improve, the increment in OE tire sales will be limited. In terms of the export market, bolstered by lower marine freight, a decline in export price and a favorable international sales environment, the export support will still exist for the overall sales. Although export orders may ebb briefly, the sales Y-O-Y increase may continue. On the whole, in September, domestic demand will ratchet up M-O-M, but the decrement status in exports will be uncertain.
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