Tire industry market prices are expected to continue to decline in 2014

In 2013, China's tire sales showed a slight negative growth, mainly due to the fact that the decrease in tire prices was greater than the increase in output. China’s tires, including truck and car tire price indices, have both fallen for more than two years and are expected to continue to decline in the first half of 2014, but the downward trend will slow down and may stabilize in the second half of the year.

At present, the price of rubber is around 18,000 yuan/ton, and the decline rate is much lower than the price of tires , so there is still a certain amount of decline in tires. The decline in tire prices generally lags behind the decline in rubber prices. From a time point of view, the decline in tyres has to lag at least half a year. At present, the price of rubber is basically the cost price of rubber, and the space for decline is very limited. The probability that rubber prices will fluctuate after a certain period of time is relatively high. This predicts that the price of tires does not have much room for growth, and is estimated to be about 5%. The time is relatively longer, and it is estimated that it will be possible to stabilize or increase after the third quarter.

Tire sales are the product of sales volume and price. As the price decrease offsets the increase in sales of some tires, and the decrease in tire prices is smaller than the increase in tire sales, it is estimated that the total sales volume of tires in China will change from negative to positive, but the rate will be below 5%.

With regard to export prices, due to the boost in overseas tire demand, prices will be relatively stable or slightly lower. Due to the increase in exports, it is expected that the increase in export delivery value may reach 8% to 10%.

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