China's tyre makers seek other markets after ITC ruling

By Namrita Chow, ERJ correspondent

Shanghai, China -- Tyre makers in China already are considering their options in the wake of the US International Trade Commission's ruling in favour of a United Steelworkers petition to restrict tyre imports from China under Section 421 of the US Trade Act.

Shandong Linglong Rubber Co. Ltd., commenting before the ITC's ruling June 18, said it would “have to look to new markets” if the US imposes quotas.

“Sure, we will definitely be affected,” said a company executive who declined to be identified. “The quantity exported would reduce a lot.”

In 2008, Linglong exported 3 million tyres to the US, the executive said.

“Even now shipments to the US are very tight. We will look for somewhere else to share the quantity (exported) to the US, like Africa,” the executive said.

“Last year we exported more than 1 million tyres to Africa,” the executive added. “Now it's increasing too much.”

Aftermarket and contract tyre maker Hangzhou Shunyuan Tire Manufacture Co. Ltd.'s export manager Bayron Liu said: “Africa business is very good. These months Africa is getting better and better.”

Mr. Liu said they are selling about 500,000 tyres a year in Africa.

Tier 2 and Tier 3 tyre makers seem to be the most affected by the situation as they have been mainly reliant on filling that gap in the US market for cheaper, non Tier 1 level tyres.

Chinese tyre exporter Sinotyre International Co. Ltd. also is looking at alternative markets in anticipation of the quotas.

“Sure. We will be affected,” said Sinotyre General Manager Steven Cui. “We are keeping in close contact with our people in North America, just waiting for the news.

“But we have to keep the ball rolling,” Mr. Cui said. “From our situation we can do nothing, we just have to adjust our production plans. We just have to keep the ball rolling,” he reiterates. And to do that the buzzword is Africa.

Staff at Sinotyre said shipments to the US have been halted indefinitely. This is forcing them to concentrate on developing business in other markets.

“If North America is so difficult and the Europeans also want to make more tests for us Chinese, we will (have to) export more to Africa,” Mr. Cui said.

In 2008, Sinotyre International exported 2 million tyres to Africa, and now the firm is planning sales promotions there to further boost sales there.

From Tire Business (A Crain publication)

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