Investigation and Analysis of Domestic Steel Tire Enterprises

As we all know, all steel tires are the most important consumer areas of natural rubber. Therefore, this time the survey was conducted mainly on steel-tire enterprises.

Tire production formula

First of all, from the rubber proportion, semi-steel tires account for half of the natural rubber and synthetic rubber, and other natural rubber and synthetic rubber are close to 1:1 in the proportion of semi-steel tires.

All steel tires

However, in the all-steel tire composition, the proportion of natural rubber used is much higher than that of synthetic rubber.

Secondly, from the perspective of the weight of the tires , the weight of semi-steel tires is basically about 6 kilograms, while that of all-steel tires is as high as 60-70 kilograms, which is more than ten times that of semi-steel tires.

Tire industry capacity

Judging from the scale of production capacity, there are 78 full-scale steel-tire enterprises in China, of which only one is full steel tire enterprise with an annual production capacity of more than 10 million sets, namely Hangzhou Zhongce, which only accounts for less than 1 of the total number of households in the country. %. Its capacity is 13 million sets/year, which only accounts for 7.4% of the country's total annual production capacity of 175 million.

There are only 8 companies with annual production capacity of 4 million to 6 million sets of steel tires, accounting for 10% of the country's total number of households. The annual production capacity accounts for 22.5% of the country's total annual production capacity. Among them, Fengshen, Xingyuan, Linglong, Double Star, and Chengshan, the five steel tires, have annual production capacities of more than 5 million sets.

There are 29 enterprises with annual production capacity of 2 million to 4 million sets of steel tires, accounting for 37% of the country's total number of households. The annual production capacity accounts for 44% of the national total production capacity.

Among the statistical steel-tire enterprises, there are 41 enterprises with an annual production capacity of less than 2 million units, accounting for 57% of the total number of households in the country, but the total annual production capacity only accounts for 25.5% of the country's total annual production capacity.

In the entire steel tire production capacity, all steel tire production capacity in Shandong Province accounts for half of the country. Therefore, Shandong is the most representative region for all steel tires, of which Dongying City is the main gathering place for Shandong tire production capacity.

Tire industry output

The overall output of radial tires this year was down year-on-year, with output of 437 million from January to September, down 2.5% year-on-year.

In the first 10 months of 2015, the average operating rate of all-steel tires was 63.65%, which was a year-on-year drop of 7 percentage points, a decline of nearly 10%.

Basic situation of mainstream enterprises

The following is a survey of some major tire factories in Shandong.

Tire Factory A

The tire plant is the larger tire factory in Shandong, and its operating rate in September and October was almost 50%. The output in the first 10 months decreased by 22% year-on-year.

The start of the plant basically followed the inventory operation, and immediately close to its own inventory bottom line will be immediately reduced production. Its current finished product inventory is slightly higher than last year and is currently maintained at 40-day inventory levels.

Tire Factory B

The capacity of tire factory B is among the top ten in the country, and the amount of processing on behalf of the tire is more. At present, the operating rate is basically maintained at less than 50%. This plant has relatively good stock control, at a reasonable level of about 25 days.

Tire Factory C

The tire plant is a small-scale all-steel tire plant, and its recent operating rate has remained at 55%. This year's overall output has fallen significantly from last year, with a cumulative 21% drop in production from January to October. Not only did the plant's output drop significantly, inventory remained high, and the number of finished inventory days at the end of October was more than 60 days.

Tyre Factory D

The plant is a mainstream full-steel tire factory, and has a certain semi-steel tire production capacity. Semi-steel tire exports account for 40%. All steel tires are based on "not three packs" of tires, and this year's reduction in output is also relatively large.

However, the plant’s tire production in October increased significantly, mainly due to the fact that its finished product inventory level was at a very low level in the country, and the inventory of all-steel finished tires was less than 20 days. Therefore, under the condition of low inventory pressure, the plant's output increased significantly.

Tyre Factory E

Tire Plant E is a small-scale all-steel tire factory, and its operating rate is about 70%, which is a relatively high level of overall start-up. The factory's exports accounted for nearly half of the total production, and this year's feedback on export orders was good, especially in Europe and the Middle East. At present, the inventory days are about one and a half months.

Tyre Factory F

The plant is mainly semi-steel. The production capacity of semi-steel tires accounts for up to 80% of the export volume. There are few exports to the United States and Africa dominates. Its operating rate is around 60%, and inventory is currently around 45 days.

Tyre Factory G

The plant is a typical tire factory in Shandong. The proportion of exports is as high as 60%. Export orders are still acceptable this year. The United States, Europe and Africa are all doing it, but domestic sales are very poor. Therefore, they mainly focus on the export market. It started at about 55%, with an inventory of around 70,000, at the 20-day level.

Shandong Province, a tire brand agent

The trader is Shandong Province, a brand of tires in Shandong Province agent, monthly shipments in the 2000-3000, the first three quarters only completed the task volume of Bacheng, is expected to be unlikely this year to complete the task, the manufacturers to reduce the possibility of mission objectives Very large.

In October, the agent’s sales were not good. Overall sales this year were down 20% year-on-year last year. The inventory is still relatively high at 50 days.

Production and inventory summary

From the perspective of the tire factory, the overall production of all-steel tires in Shandong Province has seen a significant decline this year. However, there are individual factories with less obvious production reductions than last year, and even a slight increase in production.

At present, the production and sales of each plant are basically based on stock conditions. It is difficult to increase or even reduce the production of factories with high inventory, and there is room for improvement in the operating rate of factories with lower inventory.

At present, the tire factory finished product inventory is basically kept in 30-40 days more, some 20-25 days, the overall start to further enhance the space has been very limited.

The overall domestic sales of tire factories in the country this year are all under great pressure and they are actively developing export channels. Export orders this year are relatively better than last year. However, after a sharp drop in profits, there is limited room for further price promotions.

The Shandong region is basically dominated by the circulation of “three bags” tires, which account for 6-7 percent of the market. The current lowest price is 700-800 yuan, and there is no room for more price cuts.

At present, the situation of domestic tire factories is generally poor, and all factories basically give suppliers longer payment periods. As tire factories are concerned with social responsibility such as social stability and employment, local protection is strong and production capacity is slow.

At the same time, all-steel tire factories are also facing the market impact of foreign giants.

Tire dealers, this year is basically unlikely to complete the task. At present, tire dealers can choose more brands and their loyalty to manufacturers is not as good as before. Factories must maintain a good relationship with their dealers. Generally, they choose ways to reduce tasks to ease conflicts.

The current distributor inventory is still maintained at the 40-50 day level and destocking continues.