According to foreign media statistics, as of the first quarter of 2022, the global tire price has increased by 15% on average in the past two years (the price rise in some areas is far higher than this figure), and the supply time has gradually increased since the second half of 2021. It was expected that with the gradual improvement of port congestion in North America in the spring of 2022, tire prices would stabilize, but the Russia-Ukraine conflict and the global epidemic repeatedly held up the "inflection point" of tire prices. Even the big tyre dealers and retailers have been left scratching their hands in the face of such a volatile upstream supply
Recently, the overseas tire retailer RTL.lu revealed to the media that the tires in circulation on the market are becoming less and less. "The epidemic and the Conflict between Russia and Ukraine have increased the cost of tyre manufacturing. Rising energy prices have pushed up supply chain prices. Tyre prices are now much higher than they were in 2020. One of the negative effects of higher prices is that there are fewer tires on the market."
Tire supply cuts are becoming one of the biggest headaches for the North American tire end market. As inflation continues to grow and more consumers choose to replace parts to update the performance of their vehicles, tire purchases are increasing rapidly, but demand is not matched by a dwindling stock of tires overseas. The decline in capacity caused by a number of tire plant shutdowns is adding to the low pressure on overseas retail inventories. Especially since the middle and late March of this year, domestic tire factories have suspended production and some tire enterprises failed to resume work as scheduled, so the delivery of export orders has been delayed. Overseas, a number of overseas tire enterprises halted production in Russia, tire capacity decline has become a foregone conclusion.
Delivery delays superimposed a sharp drop in capacity, overseas inventory pressure continued to increase - demand exceeds supply, tire prices generally rose substantially. This is why many overseas tire enterprises say that although they are currently bearing high cost pressure, they can continue to maintain high profits with high demand.
As we mentioned at the beginning of the article, although the tire price increased by 15% on average in the past two years, the increase of overseas market was much more than that if we break it down by regions. In the first quarter of this year, even a single increase in the head tire enterprises has reached 14%, in addition to the increase in demand, the cost of soaring is also one of the reasons.
Even when the price of natural rubber was well below its level, rising energy costs caused by Russia's war with Ukraine and a decline in other tyre-making materials sent the cost of making tyres soaring. In particular, as an important global distribution center of synthetic rubber supply in Russia, many uncertainties brought by the Russia-Ukraine war have greatly affected the supply of synthetic rubber, which has also greatly affected the price of synthetic rubber.
Since mid-March, synthetic rubber prices have risen by varying degrees almost every other week. The same is true for black carbon, which has risen by more than 20% to nearly 10,000 yuan per ton in some parts of China. At the same time, at the beginning of this year, the price of industrial electricity has increased compared to last year, superimposed all the influencing factors, the trend of tire prices has not been "shaken", some tire manufacturers forecast, to the fourth quarter of this year, tire prices are expected to continue to rise 10%.