[SMM Analysis] what are the reasons behind the price increases of many tire manufacturers in September?

SMM, Sept. 3: since 2016, tire raw material prices have risen, environmental pressure has increased, so that the battered tire market has finally ushered in a once-in-a-lifetime opportunity, the tire industry homeopathic break, gradually reverse the tire price market.

In 2018, the tide of tire price increases has not faded, January prices, February prices. Prices rose in May, and in June, tire companies became much more low-key, and some tire companies even began to issue price reduction notices, but just after mid-July, tires, which had been silent for some time, began to raise prices impatiently again. In early September, A number of tires have announced price increases!

As we all know, the upstream raw materials of tire are natural rubber, synthetic rubber, steel cord, carbon black, rubber auxiliaries and so on. The main factors affecting the tire price are the supply of natural rubber and the fluctuation of the price of rubber and carbon black in China.

It is reported that from September 1, Bridgestone, all specifications of passenger car tires on the basis of the original invoice price increased by 2% to 3%. Haoyu rubber prices rose by 3% to 5% from September 1. Fang Xing rubber on September 1 from the vacuum tire and inner tube products formal price increase, forward tire September 1 from all promotional policies cancelled, restored to the original price. What are the reasons behind the price increases of many tire manufacturers?

Throughout the tire price increase letter, tire enterprises can be said to be in unison: the recent rise in raw material prices, affected by the internal and external environment, affected by tire accessories. The price of tires has gone up. It is well known that 40% of tires are made of natural rubber, but if you look closely at the price of raw materials, it seems that rubber has been falling, then what is the reason?

In addition to natural rubber, synthetic rubber also accounts for a large part of the raw materials. With the increasingly stringent environmental supervision and inspection, a number of chemical enterprises limit production, close factories for rectification, and even some small enterprises directly seal up or can not bear the pressure to declare bankruptcy. With the rise in the price of Butadiene, synthetic rubber began to explore high in early July.

Zinc oxide is an indispensable additive in rubber and tire industry, and it is also used as vulcanizing active agent, reinforcing agent and colorant for natural rubber, synthetic rubber and latex. This year, the intensity of environmental protection has become stricter. In the early days, under the influence of environmental protection inspection in Yangzhou and Shandong cities in Jiangsu Province, non-compliant enterprises were shut down or relocated and rectified, which had a great impact on some local zinc oxide enterprises. Coupled with the recent rise in zinc prices led to the rise in zinc oxide prices, can also be used as the motivation for the tire price increase.

On August 1, carbon black manufacturer Cabot announced that it will raise the price of special carbon black products worldwide by 10% from September 1, the second price increase this year. According to the experience of previous years, Cabot can be said to be the indicator of the industry, generally after its price increase, other carbon black enterprises will raise the price. The news is undoubtedly even worse for tire companies. Presumably, the increase in the price of carbon black products is also one of the reasons for the increase in tire prices.

In addition, since the beginning of 2018, the assets of a number of tire enterprises have been auctioned, some enterprises have even disappeared in the storm, large tire enterprises bankruptcy, tire industry reshuffle has been in progress. With the large reshuffle, the competitive pressure of tire enterprises has been alleviated. From the half-year report of many tire enterprises, we can see that the profit is on the rise, and the situation that the tire is in short supply can be expected.

To sum up, the rise in raw material prices, supply exceeds demand, market environment and other factors, resulting in a rise in tire prices.