Semi-Steel Tire Operating Rate Revived After Holiday
Snapshot: In 2023, tire enterprises resumed production actively after the Spring Festival holiday. In the second week after the holiday, the operating rate at semi-steel tire enterprises resumed to nearly 70%, exceeding that in the same period of 2019. However, it will be uncertain if demand recovery and high operating rate continue.
A sneak peek at the operating rate around Spring Festival holiday from 2019 to 2023.
After the Spring Festival in 2023, tire enterprises resumed production gradually, and the operating rate revived to 72.02% only in three weeks, up 16.66% from 2022 and even rising by 3.92% compared with that in the same period of 2019 but still dropping from 2021. In 2021, the government upheld to stay put during Spring Festival. Thus, employees returned back to work timely, so the operating rate recovered at a quicker pace. In 2023, as some employees didn’t go back to their hometowns for many years, the time to resume working was delayed slightly. Thus, during this period, the operating rate at semi-steel tire enterprises in 2023 was slightly lower from 2021.
Analysis of impact of market demand on the operating rate
In 2023, China’s semi-steel tire still faced a supply glut, which was still oriented by demand. Thus, the following analysis was based on the three demand markets.
In 2023, SCI reckons that the demand for the semi-steel tire in China may exceed that in 2019. In 2023, sales of semi-steel tire are likely to head up owing to the fairish replacement tire market, which may rise by around 13% from 2022. However, sales in the OE tire and export markets may dwindle. In 2023, it is estimated that the foreign economy may underperform, leading to a drop in demand for the semi-steel tire. Thus, the export volume of the semi-steel tire in China will pare down, but the decrement may be limited and higher from 2019. In 2022, the output of China’s passenger vehicles surged to a high level, driving up the demand for OE tire. In 2023, the output of China’s passenger vehicles is likely to inch down. Thus, the demand for OE tire may trend down, but it may still be higher than that in 2019. Despite the demand decline in OE tire and export markets, the overall demand for the semi-steel tire in 2023 will ramp up from 2022 due to rising demand in the replacement tire market, which may surpass the demand in 2019. Therefore, decent demand will greatly underpin the operating rate of China’s semi-steel tire industry.
Semi-steel tire operating rate forecast in 2023
After the Spring Festival holiday, market players stocked up actively, pushing up the operating rate at tire enterprises. After two weeks (post-holiday), the operating rate at semi-steel tire enterprises was far higher than that in the same period of 2022 and even 2019. Meanwhile, in 2023, consumers’ travel will be favorable during the holidays. Thus, the demand for replacement tire may recover. Although the demand in export and OE tire markets may pull down, the decrement from these two markets may be limited and still higher from 2019. Besides, with the replacement tire market recovering, it is estimated that the total demand for the semi-steel tire in 2023 will be higher than that in the same period of 2019, strongly propping up the operating rate. And it is projected that the operating rate in 2023 may be higher than that in the same period of 2019 as well.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
