All-Steel Tire Production and Sales to Climb by over 10% in 2023
Snapshot: The production and sales of all-steel tire remained high in Q3, with low inventory pressure. The overall industry prosperity continued to level up. However, in Q4, the production and sales of all-steel tire are likely to go lower Q-O-Q.
The production and sales of all-steel tire performed well in Q3.
In the first three quarters of 2023, the total output and sales in Q3 hit a quarterly high respectively, beyond players’ expectations in early 2023. The Y-O-Y growth of output and sales was over 10%.
In Q3, the monthly output of all-steel tire was high Y-O-Y, and the production was released steadily.
In Q3, the output of all-steel tire remained high. Firstly, the production of all-steel tire was well guaranteed in Q3, and most tire enterprises maintained normal production. Secondly, the profit of the all-steel tire industry was favorable. Thirdly, the impact of holidays waned. In H2, 2023, most tire enterprises cut holiday time or even didn’t take a holiday to guarantee production. Thus, in Q3, the output of all-steel tire saw new changes and notched a yearly high.
In Q3, the sales volume of all-steel tire hit a new high, underpinned by exports and replacement tire market.
Bolstered by the high base of overseas orders, various tire enterprises actively explore and convert overseas demand. Sales in the overseas market remained high. Specifically, according to the export volume in the first three quarters, Europe, Latin America, Africa and the Middle East had relatively strong demand for China’s tires.
In terms of China’s domestic market, in September, sales in the replacement tire market ramped up M-O-M, due to intensive agents’ stock-up activities for the sake of expected price rise.
Meanwhile, in terms of the OE tire market, after production cut or halt in the traditional high-temperature period, vehicle enterprises were more active in production in September. Sales of OE tire leveled up as well. Rising replacement tire and OE tire sales together pushed up the overall sales in China.
In Q4, the all-steel tire market may see falling output and sales.
In Q4, the output of all-steel tire is likely to slide by over 9% Q-O-Q. Firstly, due to seasonal factors, the output of all-steel tire in Q4 is likely to drop. Secondly, China’s tire market may begin to weaken in Q4 after high output in Q3. Thirdly, the overall cost of producing tire may level up, but the tire price may hardly rise, squeezing the profit of tire industry. Fourthly, the tire inventory is expected to pile up in Q4, weighing on the operating rate. Thus, the output of all-steel tire may hardly see a new uptrend.
As for the sales, firstly, in Q4, sales pressure in the replacement tire market may be high, so the overall dealing may underperform. Secondly, due to high exports in the early period, the demand for tire in Q4 may be curtailed, so the tire exports may wane. Thirdly, despite the rise in OE tire sales, the sales base is low, hardly bolstering the overall sales.
On the whole, despite the expected fall in output and sales in Q4, the industry prosperity may still be eye-catching in 2023, due to high prosperity in the first three quarters. In 2023, it is estimated that the output and sales of the all-steel tire may grow by over 10% and hit historical highs. It is projected that the all-steel tire output may reach 130-140 million pieces, and the sales may be 125-130 million pieces in 2023.
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