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Although the question of Europe’s stability has fueled many talks of yet another global recession, this month’s analysis sheds a new light on the strength of expansion and upgrade throughout the industry.
A major driving force in previous months has somewhat subsided this month but we still take a look at how Natural Rubber prices are trending. After May of 2011 we have seen steady declines in pricing of the resource however this does not mean tire makers will be jumping to lower their many price hikes. As a result of the decline in price, global production will be lower next year from the ANRPC countries at 3.6% compared to this year at 5.6%. This decline in production however will be met with an increase in consumption at 3.1% compared to this year at 1.1%. A situation like this will keep all consumers of Natural Rubber guessing as they did this year.
A new and major driving force takes the spotlight this month…
As noted last month, Mining Truck shipments (90t-360t) are beginning to cast an ominous cloud over global OTR pricing and availability. As new mines come on-line and older mines adopt the current “bigger is better” mentality we are seeing a significant strain placed upon large OTR availability – haul truck and loader included.
Compared against Q2 2010 numbers we have seen a 76% increase in truck shipments in the Q2 of 2011. We see another significant increase in the 3rd Quarter comparisons with a 62% increase from 2010 to 2011. As the trend indicates there is currently only one way to go, and that is up.
During the previous shortage the key sizes that were affected most were the 57” and 63” tires sizes. This pattern is beginning to repeat itself with significantly less availability in both sizes than was seen even in the previous month. Verifiable units have entered a critical stage of availability and this has driven spot market prices to a premium. Tires with or without serials are now fetching the same prices whereas previous months there was at least some discrepancy between the two categories. Looking at the first fitment figures for new trucks shipped we can see why added demand combined with fewer available (verifiable) units is the driving force behind these premium prices.
Now is the time to make decisions regarding tires, whether it be for existing fleets or expansions fleets expansions being shipped in the near future. Taking the proper steps and evaluating alternative brands will be what separates those experiencing downtime due to lack of tires and those who don’t. Pro-activity will prove to be priceless.