It will take time for Chinese tire export orders to pick up and keep improving

Chinese tire exports in the first half of this year were hit by a supply gap in the first quarter and a sharp drop in demand in the second quarter due to the global spread of public health issues, and the industry is concerned about the recovery of China's tire export market. Since may, however, with the recovery in overseas markets, European and American tire market demand increased, combined with China's tire industry chain of the enterprise comprehensive return to work rehabilitation superposition tyre price advantage to get show, foreign tire replenishment orders to the Chinese market, Chinese tyre export orders from June began to rebound, export orders in July even compared to the rose.

At the end of January and the beginning of February in 2020, a public health event broke out in China. As it was the traditional Spring Festival, most tire manufacturers in China had stopped production and had a holiday. Due to a major public health event, the start of the factory was delayed again and again. According to zhuochuang information research, the 42 national sample enterprises monitored by Zhuochuang extended their holidays by an average of 16.98 days, leaving 27.76 days. In addition, after the factory resumed work, it was difficult for the workers to return to their posts and resume work, so it was difficult for the factory to improve its operation. Therefore, the low level operation was maintained for a long time and the overall production level was low. In addition, the domestic port closure, tire export was trapped, resulting in the Export of Chinese tires in January-February cliff-like decline. Relevant data show that the export volume of China's truck and bus tires in January-February 2020 is 375.84 thousand tons, down 16.81% compared with the same period last year. From January to February in 2020, The export volume of China's passenger car tires was 270.13 thousand tons, down 8.01% year-on-year.

In the middle and late March, China's domestic public health events were effectively controlled, but global public health events began to spread, most countries adopted restrictive measures, and China's tire exports were impacted a second time. In 2019, All-steel tires accounted for 66.1% of China's exports to Europe, North America and Asia, while semi-steel tires accounted for 75% of the total exports. As a result, China's tire export volume fell to the bottom again in April and May.

In the past two months, with the gradual recovery of economic activities in some foreign countries, China's tires in sufficient production and cost-effective advantages, export orders picked up rapidly, the overall performance is better. Relevant data show that the total export volume of China's all-steel tires in July was 332.59 thousand tons, up 30.22% month-on-month and 5.71% year-on-year. The total export volume of semi-steel tires was 200.12 thousand tons, with a year-on-year growth of 37.70% and a year-on-year decline of 3.82%. In July, China's tire exports basically returned to normal, and the export of all-steel tires even exceeded the same period last year for the first time this year.

Driven by foreign tire replenishment orders gradually returning to the Chinese market, Chinese tire export orders began to pick up in June, and even increased year-on-year in July. Zhuo and information related to analysts believe that China's tire industry is complete, restore faster production, combined with the price advantage obviously, foreign procurement and winter tire stock demand improved markedly, tire exports year-on-year rise in July, but from the current August - September order, China is still a good tyre export orders, tyre export sales in the third quarter is expected to be optimistic.

Since this year, Chinese tire export prices are not optimistic. In the face of falling sales and low raw material prices, Chinese tyre companies are once again engaged in a fierce price war as they scramble for orders from overseas markets. Relevant data show that from January to July 2020, the average export price of All steel tires in China was US $1986.82 / ton, down 8.99% year on year. By July 2020, the average export price of all steel tires in China has dropped to 1,908.59 thousand tons, a year-on-year decline of 10.87%. From January to July 2020, the average export price of semi-steel tires in China was 2510.61 kilotons, down 6.13% year-on-year. In July 2020, the average export price of all steel tires in China fell to 2478.05 kilotons, down 6.78% year-on-year.

Although in the first half of this year on China's successful resistance to disease and improve the tire manufacturing industry chain and advantage in the tire manufacturing industry in China to be fully show again, as the overseas market is gradually restored, export dependence more than 40% of Chinese tyres in export orders in the third quarter in good situation, but as the overseas replenishment and stock up in the third quarter and at the end of the cycle, if overseas tire market demand does not get effective recovery, in the fourth quarter of tire exports or difficult to keep the positive momentum in the third quarter. Chinese tyre factories cannot be blindly optimistic about short-term export improvement.