Entire top 15 Chinese manufacturers expected at Reifen China 2013
With China now the largest car and tyre producing marketing on earth, and with five Chinese tyre makers in the global top 20 its importance in the global landscape cannot be (and generally isn’t) ignored. In addition to scale, the largest Chinese manufacturers are increasingly investing in up-ing the standards of products they products, with their eyes on the global OE prize. The fact that import tariffs and labelling laws are coming and going in the midst of this means things are far from simple. With this in mind, Tyre & Accessories looks forward to attending this year’s Reifen China exhibition in Shanghai – not only for what goes on show days inside the hall, but for what the connections we make inside the trade fair tell us about what is going on in the rest of the market.
When this year’s show opens its doors between 13 and 15 November 2013 at the Shanghai New International Expo the at least 120 exhibits will cover a total of 11,500 square metres. As well as a wealth of domestic Chinese firms, exhibitors are travelling in from all over the world including: Belgium, Germany, Russia, Netherlands, Malaysia, USA, UAE, Poland, Japan, India, UK and Thailand. All this is expected to draw in an estimated 11,000 visitors.
In a demonstration of the show’s influence, all of the top 15 Chinese tyre manufacturers will participate by showing their respective ranges passenger car commercial vehicle, earthmover, agricultural and industrial tyres. Another detail worth highlighting along this vein is the fact that Reifen China’s reputation as the place to contact manufacturers directly is sustained once again this year with 45 per cent of exhibits promoting tyre manufacturers while another 40 per cent represent was trading companies.
New attractions
This year the show organisers are particularly pointing out the presence of motorcycle tyre makers and – in what is a development for the show – an increased emphasis on retreading. Before one or two specialist retreading equipment manufacturers were visible, but now we are told to expect retreaded tyre manufactures and repair material companies to be “the new highlight of the show”.
It is also worth considering business environment the show is being held in. Indeed with domestic Chinese tyre manufacturing confidence returning are exports about to speed up?
The latest data suggests that rubber prices are entering a “bull market” as futures hit a three-month high following indications that China’s economy is likely to demand more rubber for tyres. According to a Bloomberg report, rubber for delivery in January advanced as much as 3.2 per cent to 278 yen a kilogramme (2,817 a metric tonne) on the Tokyo Commodity Exchange, 22 per cent up from this year’s lowest close.
With increased oil prices caused by tensions in the Middle East it doesn’t make any difference whether we are talking about natural or Synthetic rubber. The end result will be increased prices for the tyre manufacturers and therefore increased tyre prices from the manufacturers into the markets.
“Rubber resumed a rally as optimism grew that Europe’s economy may solidify its recovery and the Chinese growth may be accelerating, leading to an expansion in demand,” said Kazuhiko Saito, chief analyst at broker Fujitomi Co in Tokyo.
China accounts for 33 per cent of global demand and tyres represent 70 per cent of natural-rubber consumption in the country, according to estimates from the Qingdao International Rubber Exchange Market. In addition The Cooper Chengshan strike showed us that they are becoming increasingly aware of their place in the global market and no-doubt the willingness to defend the value of Chinese brands will only increase as time goes by.
Talking points
In addition the ongoing discussions about labelling trade protection measures such as tariffs continue to be talking points. The latest addition to this are the reports that Tyres & Accessories recently heard that OTR tyres are not specifically covered by clean oil legislation and therefore cannot be bound by it. This in turn is likely to result in renewed interest in sourcing such products from China and therefore further competing on price with tyres produced inside the EU and for other EV. But there is a cautionary note. While the logic of the report sounds credible, this has not yet been confirmed either a third party general or the EU in particular. Nevertheless these are all good reasons to visit the show and find out more about this and other trends.
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