OTR tyre demand recovery 'gradual'

ERJ staff report (TB)

Tucson, Arizona -- The US OTR tyre market is “poised for recovery,” a Bridgestone Americas executive told attendees of the 2010 OTR Tire Conference in Tucson, but recovery is a relative term since shipments last year fell to a 10-year low.

“There are signs the market is improving,” according to Angie Jones, general manager, marketing, for Bridgestone's Off-Road Division, “but recovery will be gradual” and tied to growth in the gross domestic product and the new housing starts.

On the positive side, the US GDP is expected to show consistent growth throughout 2010, albeit only about 2 to 3 percent from the low 2009 levels.

Ms. Jones noted energy demand is expected to be relatively stable for the next several years, essentially guaranteeing a steady demand from the coal industry.

The variables to watch are construction spending and tyre dealer inventories, she said.

Specifically she pointed out there's a direct correlation between construction industry employment and tyre demand: when one's up, the other's down, based on data from the past decade. In addition, she said, construction spending is not expected to recover until 2011 or even 2012.

In addition, she said, the industry has to be careful to track true demand for tyres, taking into account demand to fill inventories at tyre distributors and end customers.

From Tire Business (A Crain publication)