Metallurgy / Chemicals / Rubber & Plastics

After experiencing the previous downturn, tire companies have ushered in a long-awaited recovery atmosphere. Recently, several listed companies in the tire industry have stated that demand is gradually repairing, with ample orders and strong production capacity. Customs data shows that more companies are exploring production capacity projects overseas in advance to cope with potential market demand, ensuring a foothold in future market competition.

Significant recovery momentum

According to national customs data, from January to April this year, China's cumulative export volume of rubber tires was 2.71 million tons, an increase of 11.8% year-on-year; The export amount was 47.461 billion yuan, an increase of 20.4%. According to customs data, in April this year, the total export volume of rubber tires in China was 730000 tons, a significant increase of 14% year-on-year, maintaining a high level; Customs data shows that the export amount was 12.708 billion yuan, a year-on-year increase of 21.8%, and the average export price continued to rise year-on-year.

Customs data shows that from May 12th to May 18th, the production capacity utilization rate of semi steel tire sample enterprises was 77.22%, an increase of 2.52% month on month and 13.02% year-on-year. The production capacity utilization rate of all steel tire sample enterprises was 67.16%, an increase of 3.27% month on month and 5.58% year-on-year.

The rebound in domestic and international demand combined with good sales performance has led to several tire companies maintaining high operating rates. Sailun Tire stated that there are currently sufficient orders in the domestic market, and the corresponding factory production capacity is playing well. The semi steel orders in the overseas market have recovered to the level of the first half of last year. Sen Qilin stated that the designed production capacity of the company's Qingdao and Thailand factories is 28 million semi steel tires per year, and 2 million all steel tires per year. The second phase of Thailand's 6 million semi steel tires and 2 million all steel tires are currently in a state of ramping up production capacity, and it is expected that the semi steel tires can be fully produced and operated in the second half of this year. In addition, tire companies such as Triangle Tire, General Motors, and Guizhou Tire have also stated that their production and sales are currently thriving and at full capacity.

Industry insiders told reporters: "In the first half of this year, tire companies showed a good recovery momentum, especially the recovery momentum of all steel tires is stronger. The recovery of demand, combined with favorable factors such as sea freight and raw material costs, is expected to continue to repair the performance of tire companies in the second half of the year

Xing Xing, Director of the Research Institute and Chief Investment Advisor of Beijing Boxing Securities Investment Consulting Co., Ltd., stated in an interview with Securities Daily that as the overall market environment improves, raw material procurement prices decline, costs decrease, and market demand continues to increase, accelerating the recovery process of the tire industry. From the development trend of the industry in recent years, although there have been some twists and turns in the tire market, the overseas market has warmed up and the domestic market demand has significantly increased since the beginning of this year. In addition, the upgrading of new energy vehicles, consumption upgrades, and policy support have played a stabilizing role in the next stage of tire industry development.

Multiple companies expanding overseas production

At present, China is the world's largest producer and exporter of tires. With a mature supply chain and high cost advantages, China's annual tire production accounts for more than half of the global total production.

About half of the tire manufacturing cost comes from natural rubber, while Southeast Asia accounts for about 80% of global rubber production, with Thailand, Vietnam, Cambodia and other major rubber producing countries.

In order to further expand production capacity and cope with future market competition, several tire companies have recently announced the opening of tire factories in Cambodia. In early May, the Qingdao Double Star Cambodian Tire Factory officially laid the foundation in Kratie Province, Cambodia. The company has invested approximately $200 million in this phase to establish a tire factory with an annual production of 8.5 million high-performance radial tires. Chai Yongsen, Chairman of Double Star Group, stated that choosing to establish a tire factory in Cambodia is a key measure for Double Star Group to implement its "localization" strategy, expand international markets, and promote high-quality development of the enterprise.

On May 22nd, General Motors' Cambodian tire production base also held an opening ceremony. General Motors Chairman Gu Cui stated that from the successful operation of the Thai factory to the official opening and production of the Cambodian production base, the company has become one of the few tire companies in China with overseas dual bases, rapidly enhancing its competitiveness in the international market.

In addition, the Cambodian factory with an annual production of 9 million semi steel tires has officially put into operation, and the Cambodian factory with an annual production of 1.65 million all steel tires project has also been fully connected.

When it comes to the current active expansion of tire companies in Cambodia, Xing Xing stated that this is mainly due to the optimistic outlook of the tire market, and domestic tire companies may have become a trend to build factories in Cambodia. With the improvement of domestic and foreign demand side, tire enterprises expand production capacity and increase supply, which is conducive to the long-term development of the company; Among the existing advantages of Chinese tire brands, fully utilizing the geographical advantages of the Cambodian market can reduce costs of raw materials, labor, transportation, and enhance the international competitiveness of enterprises.