The tire industry is facing an upward trend of prosperity.
From June 4th to 6th, Guizhou Tire showcased its latest upgraded European second-generation TBR products and technological achievements at the Cologne International Tire Exhibition in Germany, with the theme of "New Starting Point, New Journey".
Linglong Tire launched its first green and environmentally friendly tire in the tire industry at the exhibition, characterized by the use of up to 79% sustainable materials.
The Cologne International Tire Exhibition in Germany is one of the most influential tire exhibitions in the tire industry, bringing together the world's top tire manufacturers and suppliers.
On June 5th, Brand Finance released the top 25 global tire rankings. Against the backdrop of challenges faced by global tire giants, China has the largest number of tire companies on the list, including Senqilin, Triangle Tire, Linglong Tire, etc.
The prosperity of the tire industry continues to rebound
According to data disclosed by the General Administration of Customs, in 2023, China's cumulative export of rubber tires reached 8.86 million tons, a year-on-year increase of 16%; The export amount is approximately 155.812 billion yuan, a year-on-year increase of 18.7%. From January to April this year, the cumulative export volume of rubber tires from China was 2.71 million tons, a year-on-year increase of 11.8%; The export amount was 47.461 billion yuan, a year-on-year increase of 20.4%.
According to data from the National Bureau of Statistics, the total tire production in China from January to April this year was 338 million, a year-on-year increase of 11.4%; The export volume was 209 million pieces, a year-on-year increase of 10.8%.
According to Smithers' institutional forecast, the total sales of tires will exceed 2.75 billion in 2024, and the market value will increase from $239 billion in 2019 to $280 billion.
Recently, the Ministry of Finance issued a notice on the central government's pre allocated budget for the 2024 automobile trade in subsidy. In addition to directly promoting strong demand and structural upgrading in the automobile market, it is also a major benefit for the tire market. GFK predicts that the replacement volume of passenger car tires in China will reach 168 million in 2024, a year-on-year increase of 3.8%.
According to the research report of Tianfeng Securities, tires are entering a stage of short-term, medium-term, and long-term logical improvement, and are expected to experience a cycle of valuation and profit recovery and upward adjustment in the future.
Tire companies are announcing price increases one after another
Since the beginning of this year, the tire industry has experienced a wave of price increases. Earlier, Linglong Tire announced a price increase, starting from April 21st, targeting the domestic retail market company TBR product prices, with a price increase of 2-5%. The company announced a price increase on April 1st.
Sailun Tire recently announced an increase in the prices of TBR and PCR products, with a range of 2% to 5%; Guizhou Tire has raised the prices of all steel TBR, OTR, and diagonal (including solid tires) products by 3% to 5%.
In addition, companies such as Triangle Tire, Linglong Tire, Double Star Tire, and General Tire have also announced price increases for their products.
The continuous increase in prices of major raw materials such as natural rubber and carbon black is the first factor driving up tire prices.
Since February, the price of natural rubber has continued to soar, currently exceeding 14000 yuan/ton, reaching a new high since November 2021. In the first quarter, the price of carbon black was in an upward trend. In addition, the price of butadiene, an important raw material for synthetic rubber, has been steadily increasing, with prices rising by over 30% this year.
Tire company's performance is improving
According to Securities Times Data Treasure, 9 listed tire companies in A-share market achieved double-digit growth in their first quarter performance, with General Motors, Sailun Tire, Guizhou Tire, Linglong Tire, and Senqilin doubling their growth. In addition, tire companies are actively promoting internationalization and accelerating transformation to seize the global market. In 2023, the overseas business revenue of Senqilin, Sailun Tire, and General Motors all accounted for over 70%.
At present, Senqilin is accelerating the project of producing 12 million high-performance sedan and light truck radial tires annually in Morocco, aiming to put them into operation in the fourth quarter of 2024.
General Motors is promoting the construction of four major projects: Phase II projects in Thailand, Phase II projects in Cambodia, 6 million semi steel tire technology renovation projects in China, and 100000 engineering tire technology renovation projects.
At present, multiple companies have strong production and sales. Linglong Tire stated that the company's semi steel production and sales are strong, and the capacity utilization rate is at full capacity. Sailun Tire stated that the company's production and operation are currently normal, and overall orders are at a good level. Sen Qilin stated that the company's semi steel tire orders continue to be in short supply, and the overall business and development trend is good.