Orient Futures has lately carried out research and surveys at two tire makers in Guangrao county of Shandong province, after all-steel tire prices widely declined in the area.
Tire maker A
Tire maker A has four main businesses, i.e. all-steel tire, steel & nylon tire, diagonal tire and conveyer belt.
The company exports forty percent of its all-steel tire output. Among all its exports, some 30 percent go to the United States.
The U.S. anti-dumping and anti-subsidy rulings exerted a limited influence on the company, because its exports to various countries and regions are relatively balanced.
After the U.S. launched the investigations, the company shifted exports to other countries and regions away from the U.S.
Earlier, quite many tire dealers filled up warehouses under surging tire prices. They are now mainly digesting the stockpiles, with very low will to purchase more.
Such imbalance between production and sales led to higher and higher stockpiles for the tire maker.
Despite a sharp fall in the prices of natural rubber and compound rubber, it is unlikely for the tire makers to slash tire prices in the short term. If the stockpiles increase further, they may adopt other promotion methods to guarantee sales.
Tire maker B
Tire maker B is a small-sized, private tire factory located in Guangrao. The company mainly produces tires for heavy trucks and light trucks.
Although the tire prices of the company are relatively high, it is mainly focused on brand building, aiming to cultivate high-level tire brands made in China.
Many tire makers have a tight cash chain due to surging prices of raw materials. Some manufacturers face shutdown or being acquired, the company said.
It is expected the local tire industry would face reshuffling in 2017.
The company’s sales in March were only 20-30 percent of those in the same period of the previous years. Its stockpiles are sufficient for sales of 45 days.
However, the company said it would not cut prices; otherwise, the dealers would have an even stronger will of not purchasing.
The company would use other promotion methods to encourage sales in the future.Power by YOZOSOFT
