In March, the tire manufacturer’s price is increase notice did not stop, and the price increase interval was shorter and shorter. The reason for the price increase is because of the rise in raw material prices.
At present, only some manufacturers have adjusted the price. Whether other manufacturers raise prices or not depends on whether the prices of raw materials such as natural rubber will continue to rise. However, judging from the information collected so far, the situation is still not optimistic, and it is not ruled out that it will continue to rise next.
Foreign and domestic natural rubber situation
According to the seasonal law, in February, Vietnam, southern Thailand, Malay Peninsula, and the northern part of the equator in Indonesia, mainly in the Medan area, successively entered the period of stoppage. In March, the main producing areas in Southeast Asia were basically in a period of suspension. Although the current rubber tree in Cambodia has also been growing, it will not be able to cut until the end of March.
The domestic Yunnan production area will be cut in the middle and late March, but the domestic harvesting volume is not very large. Judging from the production of several rubber producing areas in the world, the output continued to decline in March.
Everyone in the tire industry knows that March is the time of the traditional downstream peak season. Demand will rise from February. On the one hand, the downstream demand will increase, and on the other side, the output will be limited. In this way, tire prices are not excluded. There will be further increases, and more manufacturers will join the price increase army.
Steel production trend
According to statistics from relevant departments, iron ore prices are still rising. China’s crude steel output from 2014 to 2018 was 1.125 billion tons, 1.123 billion tons, 1.138 billion tons, 1.048 billion tons and 1.106 billion tons respectively. It can be seen from the comparison that steel production has been on a flat basis in recent years. Slightly lower. Moreover, in 2019, China’s crude steel output will continue to be affected by two factors.
First, environmental protection normalization will continue to inhibit the release of steel production
At the national ecological environmental protection work conference held in early 2019, Minister of Ecological Environment Li Ganjie said that this year, the second round of central ecological environmental protection inspectors will be launched, and strive to complete full coverage and “look back” within four years.
Second, strict control of new production capacity is still the focus of 2019
In 2018, China’s steel industry has exceeded 30 million tons of capacity throughout the year. By the end of 2018, China has already completed the upper limit target of the “13th Five-Year” steel production capacity of 100 million tons to 150 million tons.
In 2019, this high-pressure posture continues to be maintained. The projects under construction that are illegally constructed, illegally replaced, and filed shall be immediately suspended, and the projects that have been put into production shall be immediately suspended. All regions shall establish and improve the verification mechanism for reporting violations of laws and regulations in the region, and discover the illegal activities of steel production capacity. Investigate and deal with each other, always maintain the outcrop and fight the zero tolerance high pressure situation.
Crude oil prices
The crude oil market continued to rise on Monday, and the price of WTI crude oil rose to nearly $56.7/barrel, which was over 0.7%. Brent crude oil prices rose above $66.3 per barrel, an increase of over 0.7%. The difference between the two oil prices is close to $10/barrel.
Carbon black price
Judging from the recent trend of carbon black prices, it is basically in a stable state. This is obviously inconsistent with some tire companies that have increased their prices. I don’t know why we should take the carbon black that is not much.
From the current price trend of the main raw materials for the production of tires, this month, for the tire manufacturers, the raw material situation is still not optimistic, and perhaps there will be more manufacturers affected by the price increase of raw materials, continue to issue a price increase statement.