In a year marked by negatives, Thailand shored up its status as the No. 1 source of tires imported to the U.S. in 2020, accounting for nearly 21% of tire imports last year by value.
It remains to be seen how Thailand's position will be affected moving forward, considering the pending imposition of elevated antidumping and countervailing duties on passenger and light truck tire imports from Thailand, South Korea, Taiwan and Vietnam.
During 2020, tire makers in Thailand essentially matched their volumes from 2019 as the value of imports from there edged up 0.4% to $2.8 billion.
By contrast, the value of imports from No. 2 Canada and No. 3 South Korea dropped 18.1% and 12.7%, respectively, to $1.29 billion and $1.26 billion.
As such, the value of Thailand's tire shipments to the U.S. are more than twice that of No. 2 Canada.Passenger and light truck imports from Thailand, South Korea, Taiwan and Vietnam have been subject to elevated antidumping duties ranging up to 98.44% depending on the country of origin, according to the Department of Commerce's preliminary ruling Dec. 30 in the case filed originally in May 2020 by the United Steelworkers union.
U.S. Customs and Border Protection (CBP) has been collecting cash deposits on such imports since then at rates proscribed in the ruling. Commerce is scheduled to announce its final determinations in these cases on or about May 14.
As they pertain to companies in Thailand, the duties are: LLIT Thailand Co. Ltd. (Linglong) — 22.21%; Sumitomo Rubber (Thailand) Co. Ltd. — 13.25%; all others — 16.66%.
As for the situation last year, Mexico advanced to No. 4 among countries exporting tires to the U.S. with a 1.5% increase in the value of said shipments, to $1.06 billion. Japan fell to No. 5 as the value of its exports to the U.S. fell 16.8% to $1.04 billion.
Overall, the value of imports slipped 9.3% to $13.5 billion, according to Tire Business' analysis of U.S. Department of Commerce data.
In terms of unit imports, Thailand is a solid No. 1 in passenger, light truck and medium truck/bus tires, as well as a strong No. 2 in a number of other categories such as farm and/or OTR tires.
The balance of trade in the tire industry narrowed by 5% to $9.36 billion as the value of exports grew slightly to $4.1 billion, according to Tire Business' analysis of Commerce data.
Of the U.S.'s major tire sector trading partners, the U.S. held a surplus last year with two nations — Mexico and Canada, at $138.1 million and $85.9 million, respectively. Both are measurably smaller versus 2019.
These two nations represented 63% of the U.S. tire industry's exports by value, the data show.
Mexico's exports to the U.S. totaled $1.06 billion last year, while the U.S. exported $1.15 billion worth to Mexico.
Canada was the No. 1 export destination in 2020 for U.S.-made tires at $1.43 billion, down 15% from 2019. Imports from Canada were valued at $1.29 billion, down 18.4% from 2019.
The next largest export destination was Australia, which took in $344 million worth of products from the U.S., down only slightly versus 2019.
China, which held the distinction of being the U.S.' largest trading partner in the field of new tires for the better part of the past decade, has now fallen to No. 6, as the value of its imports fell below $1 billion, down 19% from 2019 to $976.2 million.
In the passenger tire category, imports from Thailand fell 3.8% to 35.9 million units, but this total is more than two-and-half times that of South Korea (14.9 million units), the No. 2 nation on the list and equal to over 25% of all car tire imports.
Tire Business' analysis of the Commerce Department data shows that Thailand and China have essentially swapped positions among countries exporting passenger tires to the U.S. since the U.S. imposed elevated import duties on such tires from China.
Since then, imports of car tires from China have dropped to 2.48 million units last year from 50.4 million in 2015. During that same period of time, imports from Thailand have tripled to 35.9 million units last year from 11.4 million in 2015.
Thailand's ascendancy to the top of this category is linked to the opening of four plants by Chinese tire companies with over 30 million units of annual passenger/light truck capacity in that country since 2015:
• General Science Technology Co. Ltd. (JGST) — car and truck/bus tire plant in Rayong, opened December 2019; 6 million units/year capacity;
• Qingdao Sentury — car/light truck tire plant in Rayong, opened in 2015; 5 million units/year capacity;
• Shandong Linglong — car/light truck tire plant in Bangkok, opened in 2013; 13.2 million units/year capacity;
• Zhongce Rubber Group — car/LT and truck/bus tire plant in Rayong, opened in 2015; 11 million units/year capacity.
In all, 21 tire companies are active in Thailand, including seven of the majors — Bridgestone Corp., Cheng Shin Rubber, Continental A.G., Goodyear, Group Michelin, Sumitomo Rubber Industries Ltd. and Yokohama Rubber Co. Ltd. — plus seven Thai-based tire makers, such as Deestone Corp., Hihero Co. Ltd., Otani Tire Co. Ltd. and Vee Rubber Corp. Ltd.
In addition, Double Coin Holdings Ltd. opened a truck and OTR tire plant in Thailand in 2017 and Prinx Chengshan Tire Co. Ltd. commissioned a truck/bus tire plant in Chonburi, Thailand, in March 2020 with an annual capacity of 800,000 units;
Thailand's lead over No. 2 South Korea widened as imports from Korea dropped 13.6%. Likewise No. 3 Mexico narrowed the gap to South Korea as Mexico's shipments fell just 1.6%.
The declared customs value of imported passenger tires last year was $48.75, down $2.52 — or nearly 5% — from the 2019 value, the data show. Among the 10 largest countries on the list, values ranged from $34.85 for Vietnam to $61.95 for Mexico.
In light truck tires, No. 2 Canada narrowed the gap to top dog Thailand with 12% higher shipments versus Thailand's 1.8% increase — 3.94 million units versus 7.81 million.
Vietnam, South Korea and Mexico rounded out the top five with imports of 2.84 million, 2.05 million and 2.05 million units, respectively.
Overall, imports of light truck tires climbed 4.5% to 27.9 million units, the Commerce Department data show.
The average declared customs value of an imported light truck tire slipped slightly to $75.41.
Average prices among the 10 largest importing nations ranged from $55.37 (Vietnam) to $95.06 (Japan).
In the medium/heavy truck/bus tire category, Thailand was the clear No. 1 with shipments of 4.77 million units, up 3% over 2019. Thailand's total represents 36.2% of all imports in the category, up from 31% in 2019.
China, No. 1 in this category from 2003 through 2018, retained the No. 2 spot last year despite a 56.6% drop in shipments, to 1.38 million units.
The drop reflects the imposition of antidumping and countervailing duties in February 2019 by the U.S. in truck/bus tires from China. The duties range from 20.98% to 63.34% countervailing and 9% to 22.57% antidumping.
Japan, Canada and Vietnam were grouped closely together at Nos. 3, 4 and 5 with shipments of 1.27 million, 1.26 million and 1.24 million units, respectively.
The relative strength of the import sector last year was in stark contrast to the performance U.S.-based tire makers, and resulted in a marked increase in the import share of the U.S. aftermarket.
Domestic production fell by double-digits last year in all key categories, including a 25.5% drop in passenger tire output, reflecting the weeks and even months of suspended manufacturing at most U.S. tire plants during March, April and May as companies dealt with the fallout of the COVID-19 pandemic.
The production fall-offs — light truck and medium truck tire manufacturing was down 18.5% and 21%, respectively — were significant enough that the level of production was the lowest in decades, according to USTMA data and research by Tire Business.
For passenger tires, production of 91.2 million units was the lowest output since 1955.
