Up to 16% increase, leading domestic and foreign tire companies issued the latest price increase notices for 2022

In the beginning of 2022, tire prices in Domestic and abroad will increase

On December 28, Michelin North America announced that it will increase the price of passenger car and light truck tires under the brands of Michelin, BP and UNIL by up to 12%, and the price of motorcycle tires by 5%. The price of on-road and off-road commercial tires has risen by as much as 16%. The new price policy will take effect in the U.S. and Canada on January 1, 2022.

On the same day, Hankook Tire Co. also announced that it will increase the price of Hankook Heluofeng passenger cars, light trucks and commercial tires from February 1, 2022, by up to 10%, and the products in each brand portfolio will be It's different. Not long ago, Giti Tire, Bridgestone, Nexans, Sumitomo, and Tong Yiou also announced that they will increase their prices in the North American market from January 2022, with a price increase of up to 10%.

In addition to overseas markets, price increases in the domestic(China) tire market are still being issued one after another. On December 29, Zhengxin Rubber issued a price increase notice. Starting from January 1, 2022, the price of Maxxis TBR products will be increased by 3%-5%.

On December 28, Xiamen CST issued a price increase notice. Starting from January 1, 2021, the price of special tire products will be increased by 3%-6%.

On the same day, Dalian Goodyear issued a notice of price increase for truck and bus tires. It is expected to increase product prices from January 25, 2022, with an average increase of 5%.

Shandong Xintu Tire also issued a price increase letter on December 28, deciding to increase the price of some all-steel products by 2% from January 10, 2022.

On December 27, Guizhou Tire issued a price increase notice, announcing that starting from January 1, 2022, it will increase the price of industrial tires. At the same time, Guizhou Tire also said that according to the price trend of raw materials, it will not rule out continued price increases in the future.

Dunlop also issued an announcement stating that due to the increase in raw material prices, Dunlop will adjust the price of some Dunlop passenger tires by 3% to 5% in January 2022.

Shanghai Hankook Tire also issued a price increase notice, announcing that it will increase the price of passenger car tires and truck and bus tires under the Hankook and Laufenn brand in January 2022. Hankook also revealed that it plans to increase prices for the second time in the first quarter of 2022.

Just like the statements of major tire companies in their price increase letters, the current price increases by tire manufacturers are the result of multiple factors, including rising operating and raw material costs, increased logistics costs, and other market factors that affect internal costs. In order to avoid falling into the dilemma of loss, the selling price of the product must be adjusted.

Global inflation, tire raw material prices fluctuate and rise

According to the Baltic Sea Container Shipping Index, although the current 40-foot container freight rate has fallen by about 15% from the September all-time high of 11,000 U.S. dollars, before the epidemic, the freight for this specification only required 1,300 U.S. dollars. 90% of the world's cargo is shipped by sea. Such high shipping prices have increased global inflationary pressures, and the current inflation is more serious than expected.

High shipping prices have threatened the recovery of the global economy. A report by the United Nations last month pointed out that between now and 2023, global import prices are expected to rise by up to 11% and consumer prices by 1.5%. In the context of global economic inflation, important raw materials for tires have also experienced substantial price increases. Earlier, the financial reports of many tire companies pointed out that the prices of carbon black, steel, rubber and other raw materials have risen sharply since the second quarter.

In the last week of 2021, the price of natural rubber oscillated again, reaching 14,815 yuan/ton. Some analysts said that this may be the last wave of increase at the end of the year. According to ANRPC's "Rubber Market Intelligence Report", affected by the overwintering of rubber trees in major producing countries, the market is expected to be in short supply in the short term. On the other hand, the price of carbon black, the main raw material for tires, is still at a high level.

It is also mentioned in the price increase notice that continuously rising electricity prices and coal prices are also an important reason why tire companies continue to issue notices. According to documents such as the National Development and Reform Commission to improve the time-of-use electricity price mechanism, many provincial development and reform commissions have recently issued documents to improve electricity prices, and industrial electricity prices have risen by as much as 20%.

Do not rule out that tire prices will continue to rise in the future

According to industry analysts, the global shipping crisis caused by the epidemic may cause delays in the delivery of goods and contribute to the effect of inflation, which may continue until 2023. Judging from the current price trends of the main raw materials of tires, most of them have obvious price increases, which means that in the short term, the general environment of tires subject to the price increase of raw materials will not change. Many tire companies also pointed out in the price increase letter that they will not rule out further price increases in the future.

Therefore, there is a high probability that the pressure facing the tire industry will continue for some time. Dealers should treat this “protracted war” of price increases in a rational manner, stock goods reasonably, and avoid capital disconnection.