Raw material prices rose a lot of product backlog tire companies face double pressure

As the cost of raw materials for domestic tires has surged, Jiatong Tire (600182.SH) is facing significant challenges. Yesterday, Wu Zhiwen, director of the company’s tire division, revealed to reporters that internal discussions are underway regarding potential price hikes. However, with the automotive industry showing signs of slowdown, there's a growing inventory of unsold tires across the market, leading to fluctuating distribution dynamics. While Jiatong considers raising prices, competitors like Pulley and Hankook are actively promoting discounts. This strategy, in reality, reflects a decline in sales performance. A local dealer shared with reporters that some tire brands are offering promotions such as "buy eight get one" for Gold Cup tires, while others like Santana 2000 and Hankook are running "buy ten get one" deals. The dealer expressed frustration: “Many tire companies are struggling with excess stock.” However, Shen Huixing, general manager of Shanghai Quyang Tire Co., Ltd., noted that not all products have seen price increases yet. “As a Goodyear distributor, we haven’t raised car tire prices so far. But tread rubber and light truck tires have gone up by 5%,” he said. Another representative from Nanjing Kumho Tire Co., Ltd., working with Shanghai Aotai Trading Co., confirmed that prices for most common passenger car tires have risen by 15%, covering dozens of models. A Kumho dealer also shared concerns: “Even though we’ve increased our prices, sales after the hike have been disappointing. The company headquarters visited last Saturday to discuss poor performance. I think they will launch major promotions soon.” According to Tan Yukun, deputy secretary-general of the tire division at the China Rubber Industry Association, most truck and bus tires have already seen price increases. Passenger car tires, however, remain relatively stable due to higher profit margins. “Truck and bus tires use a lot of raw materials, so it’s hard to avoid price hikes. Notably, natural rubber prices remained steady from January to May this year, but in June, they started rising sharply—over 1,000 yuan per ton, reaching 16,000 yuan/ton from 12,000 yuan/ton. This hasn’t fully impacted passenger car tire production yet.” Wu Zhiwen added that rising oil prices have further pushed up the cost of tire and rubber materials. Compared to last year, butadiene rubber in synthetic rubber has increased by over 30%, while antioxidant prices have jumped by about 80%. Natural rubber prices are also on the rise due to poor weather conditions in producing regions. Shengao Chemical Co., Ltd., China’s largest manufacturer of anti-aging agents, reported that the price of its 4020 model rose from around 38,000 yuan/ton last year to 44,000 yuan/ton in June, surpassing expectations. “It’s now between 45,000 and 46,000 yuan/ton,” said Miss Wu from the sales department. She explained that the increase is due to a 50% rise in aniline, a key raw material for antioxidants. The company expects the upward trend in raw material costs to continue through the second half of the year, significantly impacting operations.

EPP Medical Cool Box

Life Science Thermal Packaging,Temperature-sensitive Biologics Cold Pack,Biologics Biomedical Cooler System

Nantong Ecotherm Insulations Co., Ltd , https://www.vactherm-insulation.com