"This year's loss of face has increased to 50%" tire prices have been forced to rise

The price of natural rubber continued to rise at a high level, and Chinese tire companies that had already expanded to 50% of the loss faced a larger price increase.

Yesterday, the Morning Post reporter learned from the tire branch of the China Rubber Industry Association that since the Spring Festival this year, most tire companies have carried out price increases of 5% to 8%, the highest increase since last year. It is reported that companies that have not raised their prices are also planning to increase prices in March and April. It is worth noting that the Morning Post reporter also learned that some foreign-funded enterprises are fighting for the market, but they are clamoring for price increases and special prices. The price after the special offer is even lower than before the price increase.

Highest price increase 8% to 10%

At the end of last year, due to the high profit margin of foreign-branded tire companies, there was no corresponding increase in the price of raw materials in order to capture more market share. This has affected domestic brands that have already raised their prices. Domestically-owned tire companies have also called for tire companies to raise prices collectively.

It is worth noting that, in this round of price increases, foreign brands have almost fully participated. According to data from the tire branch of the China Rubber Industry Association, foreign companies such as Michelin, Bridgestone, Cooper, Hankook, Kumho, Yokohama, Sumitomo and other tire companies have announced that they will increase their prices by 5% in China's tire matching and replacement market after the Spring Festival. ~8%. Domestically-funded companies such as Shuangqian, Triangle, Hangao, Guilun, Fengshen, Linglong, South China and other tire companies raised their domestic tire prices by 5%-8% again, and raised the export price of tires by about 6%.

Zhang Wanyou, deputy general manager of Shuangqin Group Co., Ltd. (600623), told reporters yesterday that this was the biggest increase in tire prices since natural rubber prices skyrocketed last year. Some companies raised their prices by 8% to 10%.

"Last year, the tire companies suffered a loss of more than 20%. Since this year, the loss of tire companies has exceeded 50%. No company can 'hold firm.'" Yesterday, a relevant person in charge of a foreign-funded company said that there are still a few price increases. Tire companies will certainly follow up prices immediately.

It is understood that some foreign-owned tire companies such as Yokohama and Dunlop, in order to seize the market, not only did not increase prices, but also carried out promotions.

It is worth noting that tire companies are ushering in a new round of reshuffle and fierce competition is underway. It is understood that although foreign companies recently announced a collective price increase, some companies will launch some special products in order to grab the market and complete sales targets, and these special products tend to be higher-volume products. Taking Michelin tires as an example, the special products launched recently have a price of 100-200 yuan/bar, which is lower than the price before the price increase.

“This is a common practice for some tire companies. By next month, they will change their products to make special offers, but the total price of their products will still increase, and through sales of special products, their sales are also guaranteed.” Agents representing several tire brands revealed to reporters.

Some small-scale tire companies have stopped producing some companies to seize the market has achieved results - some small tire companies have stopped production. For these companies, if brand tires do not increase prices, raising prices means losing the market. According to data from the Tire Branch of the China Rubber Industry Association, businesses that did not take a holiday during the Spring Festival in previous years have taken holidays in order to reduce their output during the Spring Festival, and most companies have put in more 3 to 5 days than in previous years.

“The rise in natural rubber prices has led to a share of more than 50% of tire costs, compared with 42% to 45%. This also means that tires are also subject to a 50% increase in price. Since last year, tire prices have accumulated. The increase is also only 20% to 30%, tire companies are still under pressure." Zhang Wanyou said that tire companies can only through internal digestion, adjust the product structure, such as looking for alternatives to natural rubber, the development of tubeless tires. In addition, we must increase production capacity and increase sales to dilute the cost.

However, letting the tire companies relax slightly, the price of new high natural rubber has recently declined.

Recently, as Japan's natural rubber prices skyrocketed and fell, domestic natural rubber prices also began to fall. The main contract price of natural rubber futures even fell to a low limit on the 8th. Yesterday, the spot price of national standard grade 1 rubber was around 41,000 yuan/ton, and the natural rubber futures contract of Shanghai Futures Exchange RU1105 closed at 36,370 yuan/ton, down 1.88% from the previous day.

Dong Jing Futures analyst He Jing believes that the recent return of Tianjiao to a strong uptrend is almost impossible. Aeolus Tire Securities Investment Department sources also told reporters that the skyrocketing days since last year, natural rubber is not sustainable, so the company is now small quantities, will not press too much inventory.

"Our tire companies want raw material prices to remain stable." Zhang Wanyou hopes that natural rubber prices will return to rationality.

Let the tire companies feel hope that, from the supply point of view, China's Hainan has ushered in a large amount of supply at the end of March, and by the end of April, the spot supply of plastic-producing areas abroad will become increasingly abundant. This may be able to curb further increases in natural rubber prices.

According to the statistics, in October 2009, the spot price of natural rubber was only RMB 16,000/ton, and once this year it reached RMB 43,000/ton. In the meantime, in the fourth quarter of last year, tire companies jointly proposed that China's rubber industry urge the State Reserve to sell rubber to stabilize raw material costs.