At the beginning of 2022, the semi-steel tire market prosperity index showed a downward trend due to the influence of many factors, such as the domestic and foreign macroeconomics, financial situation, and the supply-demand of the tire industry. Although the sales volume of semi-steel tires has risen in the last two months, tire dealers still lack the confidence to stock their product supplies.
1. The production & sales of passenger cars are declining.
In April 2022, automobile production and sales decreased significantly, setting a new record for the new monthly low in the same period in the past decade. Production and sales were 996,000 and 965,000, respectively, decreased by 47.1% and 48.2% compared to the previous month. Moreover, with the travel restriction of private cars, the confidence in the PCR tire market is worsening.
2. Low consumption rate, Longer inventory turnover rate
According to the data, the overall tire inventory in Shandong province rose month-on-month in early June. As of June 2, the sample enterprises' average turnover rate of the semi-steel tire was 44.82 days, which was higher by +1.41 days compared to the previous week. However, With the arrival of the seasonal demand, the market may take a turn for the better. However, at present, confidence in the market is relatively lacking. It is expected that the dealers will continue to control the inventory in June.
3. Government policy to help stimulate the market.
At the beginning of April this year, the General Office of the State Council issued a regulation to stimulate consumption potential and promote market recovery. The policy about subsidies for automobile buying in the countryside will be implemented starting in June. The new policy is expected to boost the sales of oil-fueled vehicles by 2-3 million and new energy vehicles by 3-5millions. The government intends to encourage the demand for automobiles, especially electric vehicles, and boost the tire industry market.
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