Early 2023 Tire Exports Hit a High, but Q2 to Lack Support
Snapshot: From January to February 2023, the total tire export volume hit a five-year high, strongly bolstering the sales volume. With the slower growth in overseas economy and the decline in demand for tire, players commonly reckoned that the tire exports in 2023 were likely to fall Y-O-Y. Therefore, although the tire exports trended up in January and February, players still worried about the tire exports in Q2.
China’s tire exports hit a high at the beginning of 2023.
China’s tire export hit a high from January to February 2023. The total export volume in January and February hit a five-year high, strongly bolstering the total sales and operating rate.
From 2019 to 2023, China’s total tire exports in January and February trended up Y-O-Y. However, due to force majeure factor, China’s tire exports were hindered and moved down briefly. After that, China’s tire exports recovered and saw a Y-O-Y increase from 2021 to 2023. In 2023, tire exports saw a good start and the total export volume in January and February hit a five-year high. China’s total export volume of 40111000 in January and February was 402.67kt, up 11.36% Y-O-Y, while that of 40112000 was 629.37kt, up 7.88% Y-O-Y. According to SCI, reasons of the rise in tire exports were as follows. First, some previous orders were postponed to be delivered after the Spring Festival holiday, leading to intensive sales in exports. Second, as the tire price was expected to rise, overseas traders stocked up ahead of time, leading to intensive exports of tire in January and February.
Analysis of China’s top 20 trade partners of tire exports
Source: GACC
According to the data, the tire export volume to most countries increased except the U.S., Vietnam and Canada. Especially the export volume to Mexico, Brazil, Saudi Arabia and Paraguay increased notably Y-O-Y, strongly bolstering China’s tire exports.
Research on China’s tire exports
At the beginning of 2023, tire exports performed well. The total export volume hit a five-year high. However, considering the sluggish situation of the global economy, will the strong trend of tire export remain in the coming days? SCI did a research on the export orders received at tire enterprises in April.
Sample analysis: SCI conducted a research on tire producers, including 12 all-steel tire enterprises and 5 semi-steel tire enterprises.
Research results
SCI researched on 17 tire enterprises. 88% of them showed that the export orders in April will slow down from March, but which may be fairish, bolstering the overall sales. Only 12% of them showed that the export orders are likely to be stable in April, strongly driving the overall sales.
Analysis of influence factors on exports
In Q1, 2023, tire export orders were fairish with smooth sales, strongly boosting the sales volume. First, the export price of tire was expected to rise, so overseas traders conducted orders for replenishment. Second, previous orders were postponed to be delivered, leading to good performance in the tire exports in February and March.
The overseas market started earlier than China’s market. The recovery in the market happened more in 2022. With rising overseas demand, China’s tire exports hit a record high in 2022. In 2023, the global economy is predicted to underperform, so the overseas demand will fall to the normal level. In April 2023, the export orders may be delivered, and overseas traders are likely to complete the replenishment and show thinner appetites for receiving goods. Thus, China’s export orders may fall from a high level.
Q2 tire exports forecast
With an earlier recovery in the overseas market, the overseas demand rebounded earlier than China’s demand. In 2023, the global economy may underperform on the whole, resulting in a decline in the overseas demand for tire. It is predicted that the overall tire exports may move down Y-O-Y. As the export orders were delivered in Q1, the new orders may be conducted more slowly. The tire export volume is predicted to decline. Players may worry about the tire exports in Q2.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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