Tire industry pressure double anti-price war policy changes
The year 2014 was a year of increasing pressure on Chinese tire companies. During this year, exports were blocked, major policies and standards related to the industry changed, and the “price war†became increasingly fierce... A series of sudden and new pressures continued to test domestic tire companies. Fragrance For Car fragrance for cars, wholesale fragrance oil for car,fragrance oil for car, hanging diffuser Car Air Freshener, flavor Perfume Guangzhou Dingjin Flavors & Fragrances Co.,Ltd , https://www.dingjinflavors.com
Tire World Net used “new pressure†to summarize the new tests and new problems encountered by Chinese tire companies in 2014.
Continuous "double reverse" export blocked
In 2014, China’s tires continued to encounter anti-dumping and countervailing investigations in other countries, causing severe disruption to exports in the second half of the year.
On June 3, the United States Steel Workers Union (USW) demanded the initiation of anti-dumping and countervailing investigations on passenger and light truck tires imported from China, and accused the dumping margin of 60.15% and the rate of subsidies to be 25.73%.
On September 10, the Russian-Kazakh customs union followed the example of the United States and conducted anti-dumping investigations on imported trucks, buses, trolley buses and trailer tires.
On December 22, the US Department of Commerce announced the revised anti-subsidy initial discretionary tax rate, and China-made tires are subject to punitive tariffs ranging from 11.74% to 81.29%. The initial anti-dumping rate will be made in January 2015.
According to statistics from China Customs, the delivery value of Chinese-origin tires for export to the United States was 3.337 billion U.S. dollars, which is the largest amount of trade remedy measures taken by the tire industry to date. The case involved thousands of domestic enterprises, of which 68 were manufacturing enterprises, affecting nearly a million industrial workers in China's tires and related industries. The amount of Russian-Belarusian anti-dumping cases amounted to 400 million U.S. dollars.
The data shows that from the second half of 2014, the export of tires from Dongying City, Shandong, China’s tire export destination, has slowed down significantly. From January to November, the accumulative growth rate of Dongying tire exports was only 2%, which was 15.5 percentage points lower than the cumulative growth rate of 17.5% in January-November 2013.
Industry experts said that the United States is the largest market for tire exports in China, and Russia is one of the fastest-growing markets. “Multi-country continuous anti-dumping will be a very big blow to Chinese tires.â€
Homogeneous competition price war escalation
Over the years, the problems of weak corporate innovation, low brand awareness and serious product homogeneity have plagued the healthy development of China's tire industry. In 2014, under the background of export obstruction and slowing down of the industry, the domestic tire companies’ inventory has increased significantly, which has led to a fiercer price war, and the inherent weaknesses have become more prominent.
The data shows that in the year, the overall decline in domestic tire prices reached more than 10%, and continues to show a downward trend.
The decline in the prices of natural rubber and other raw materials should have brought about positive development for the tire industry. However, due to the quagmire of price war, the profit growth of enterprises has not been obvious. On the contrary, some companies even suffered losses due to other costs. Industry insiders expressed that the escalation of price war not only brought tremendous pressure on business operations, but also restricted the entire industry into a vicious circle.
In addition, some experts have bluntly stated that Chinese tires are frequently subject to anti-dumping in foreign countries, aside from the environmental factors such as the rise of international trade protectionism, and have a direct bearing on the low prices of Chinese tires.
Policy changes
In 2014, a number of industrial policies and related standards in China's tire industry changed, placing new demands on the operation of tire companies and the development of the entire industry.
In January, in order to resolve excess capacity, Shandong Province issued the "Implementation Opinions on Resolving the Contradiction of Severe Overcapacity," which puts forward higher requirements for new capacity of tire companies.
On August 22, the National Standardization Management Committee promulgated the "General Technical Specification for Composite Rubber" (draft for comment), which stipulated that the content of raw rubber in compound rubber should not exceed 88%. Due to the large difference between 95% and 99.5% of the “composite rubber self-regulatory code†formulated by the China Rubber Association in 2006, the new regulations have caused widespread controversy. The "Code" was formally issued by the AQSIQ and the National Standardization Management Committee on December 31 and will be implemented on July 1, 2015.
Industry insiders said that after the standard is formally implemented, it will cause the import cost of the company to increase, and the entrance to compounded rubber will be closed.
On September 17, the Ministry of Industry and Information Technology formally announced the “Tire Industry Access Requirements†that have been brewing for a long time and will be implemented on October 1.
This condition emphasizes energy conservation and environmental protection, and puts forward hard indicators such as energy consumption, resource consumption, and pollutant emissions for tire companies.