40.7% Growth in Chinese Tire Export Volume in Jan.-Apr. of 2010

May 25, 2010 - PRLog -- www.shcri.com - According to China Customs, from January to April of 2010, Chinese tire export volume totaled nearly 1.06 million tons, rising by 40.7% YOY; the export value amounted to USD 2.80 billion, growing by 39.3% YOY. Moreover, the tire special safeguard case of USA does not influence Chinese tire export severely. From January to April of 2010, China exported 234,800 ton tires to USA, 1.5% increase over the same period of 2009; the export value came up to USD 612.50 million, dropping by 4.9%.

In 2010, Chinese tire industry is exposed to the prominent problems of substantial cost increase and profit growth rate decline. Firstly, prices of raw materials such as natural rubber rise significantly. In April, the price of natural rubber reached about 25,900 CNY/ton, rising by over 100% YOY. Secondly, the charges of water, electricity and gas also rise continuously. Thirdly, the labor cost assumes huge increase. It is reported that transnational tire companies in Chinese market have adjusted their tire prices successively since 2009Q4. The average price growth rate exceeds 10%. In 2010Q2, another group of transnational tire companies declared to raise the tire prices by 5%-8%. Furthermore, Chinese domestic tire enterprises also adjusted the prices on both the domestic market and the export market at the end of 2009 and the beginning of 2010, but the growth rates are only about 3%-5%. In general, the price growth is in a slow progress. Some enterprises will follow others to raise the price, while some others will not raise the price so as to retain the market.      

Currently, in Chinese tire industry, there is acute product structural imbalance, severe homogeneity, insufficient production capacity for new products (e.g. environment-friendly tires and safety tires), and blind expansion of low-end products. Moreover, the international trade conflicts will be more frequent in 2010. Besides USA, EU also puts forward environment-protection barrier on imported tires, while Argentina has implemented anti-dumping measures on Chinese tires. The trader barriers for Chinese tires will exist for a long period. Thus, the export of Chinese tires remains grave.

Both Europe and USA have raised the requirements on tires from the aspects of safety, environmental protection and low carbon economy. After the implementation of REACH by EU, all the tires exported to Europe have to go through detection to ensure that the hazardous substance contents are standard and related documentary evidences are demanded. Otherwise, they are prevented from being exported to EU. The Directive 2005/69EC (environment-friendly extending oil) restricts the use of 8 kinds of polycyclic aromatic hydrocarbons (PAHs). The tire label directive on the fuel efficiency and other essential parameters will be implemented on November 1st, 2012. The directive on the noise level of tires was implemented on October 1st, 2009. USA will also enforce the regulation on fuel efficiency after one year. These standards and regulations greatly lift up the barriers for Chinese tires to enter the markets of Europe and USA.  

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The primary and secondary research was conducted by consultants in China who know the industry and the local markets well.