Kortrijk Belgium - Demand for Chinese-made truck tires picked up sharply at the start of the year as buyers reacted with their wallets to the threat of a new round of US import tariffs, NV Bekaert SA has reported.
In a first quarter trading update, the Belgian steel tire cord maker reported strong organic volume growth in tire cord and increased market share in Chinese tire markets.
The tire industry in China was boosted in anticipation of new US import duties and increasing raw material prices, added Bekaert's 11 May update. The group, though, did not think this effect to be repeated in the second half of the year.
“For several months there have been rumours and announcements of new import duties that will be imposed by the US on Chinese tires”, Katelijn Bohez Bekaert’s chief communications & IR officer explained in a subsequent written statement to ERJ.
Initially the tariffs were to have been imposed in June, though this decision has now been postponed until later this year.
In any case, said Bohez, the situation “has created a boost in demand by US distributors. The Chinese tire industry benefited by high export-demand by US tire importers/distributors buying from China before the duties on Chinese truck tires.”
Another positive factor for Bekaert has been a “sudden uplift” in its steel (raw materials) prices in China since April, Bohez continued. This, she said, has benefited selling prices for the group’s tire cord products.
"So Chinese tire makers also may have pulled ahead some orders for tire cord to us, before the price rises,” suggested the Bekaert official, while adding: “In the meantime, steel prices declined a bit again .. so nobody knows how and where pricing will land.”