Shen Jinrong, President of Zhongce Rubber Group Co., Ltd. 

In recent two years, due to the fall in price of raw materials such as natural rubber, the price of tire also constantly declined. Is there any space for fall in price of tire in the future?

According to the statistics of CRIA, from January to October 2015, the profit of tire enterprises fell by 35.44%, and the profit margin of sales revenue was 4.21%, with a decrease of 1.32%; there were 9 unprofitable enterprises and the deficit of the unprofitable enterprises was 729 Million Yuan; and the inventory of finished product fell by 4.47%. If all the profit of tire enterprises is zero, there is only a space for fall of at most 4%, whose influence is very limited.

On one hand, in 2015, the price of almost all chemical materials for tire was stable and even rising, and the scale of raw material enterprises became more and more concentrated, with the layout of all flowers blooming together in former years completely changed. The main reasons for this situation are that the nation intensifies effort in environmental protection and control, the environmental protection input of the enterprises increases and the cost increases. The price of framework materials with steel cord as representative has fallen to the bottom. At present, only carbon black has some relative fluctuation in price. However, under the condition where the steel industry drastically shrinks and the output of its main raw material coal tar declines, the price has little space for fall on the whole and it is the mainstream for the price to remain low. In addition, other costs including labor cost, depreciation cost, etc. not only have no space for fall, but even increase. Therefore, it is analyzed from the perspective of cost that the price of tire has no space for fall.

On the other hand, seen from the supply-demand relationship, it still exists in the sticky situation, especially, since the north has entered winner, the tire starts to enter the slack season for consumption. After one round of up and down in supply and demand, the market basically exists in a relatively stable status at present. In addition, the period with the highest inventory of tire has passed and the inflection point for inventory growth has appeared, therefore I am cautious and optimistic for the sales situation of the future market.