The operating rate has skyrocketed, and Chinese tires can't stop it

The first order of the new year in 2025 by Eagle Tire exceeded 50,000; in January 2025, the daily output of semi-steel tires of General Shares in Thailand exceeded 30,000, setting a historical high; at the end of 2024, Shandong Yuelong Rubber received orders, and Truck tire orders have been scheduled to the second quarter of this year.

In the first two weeks of 2025, China's tire operating rate once again hit the boundary, and the operating rate of semi-steel tires close to 80% hit a five-year high.

Tire operating rate continues to be hot
Although the Spring Festival holiday is less than half a month away, the tire factory does not seem to be taking a break at all.

Institutional data show that the operating rate of semi-steel tires of Chinese sample tire companies has remained above 77% for two consecutive weeks, setting a new operating rate record, which is 10%, 14%, 19% and 6% higher than the operating rates in the same period of the past four years.

Although the operating rate of full-steel tires has not yet recovered to the 70% profitable operating rate baseline, it has improved compared with the past two years. In the first two weeks of 2025, the average full-steel tire operating rate of sample tire companies was 58%, 4% and 6% higher than the same period in 2024 and 2023 respectively.

At the beginning of the year, port cargo throughput increased by 1.3% year-on-year, and vehicle freight flow increased by 2.1% year-on-year. Among them, the container throughput of Qingdao Port and Rizhao Port ranked 4th and 10th in the country respectively, which indirectly confirmed the popularity of domestic tire exports.

In an interview with the media, Eagle Tire said that in the first batch of more than 50,000 tires shipped in a single day, the number of exports reached more than 30,000-60% of the passenger car tires manufactured by the Qingzhou factory were directed to overseas markets. ‌

At the same time, the recovery of port cargo throughput has also gradually restored the prosperity of truck freight, which has been immersed for a year and a half, and driven the market consumption of truck tires.

In addition to the improvement in truck freight, road freight volume has also seen a significant increase - in the second week of 2025, a total of 56.222 million trucks passed through national highways, an increase of 8.08% month-on-month. The continued growth in freight demand has driven the demand for truck tire replacement to rise simultaneously.

In addition to the increase in replacement demand, the increase in tire prices is also one of the reasons for the "step-by-step increase" in the start-up rate in the first two weeks of January.

Driven by price increases, the market has started a rush to buy goods
On December 31, 2024, the global tire giant Michelin issued a 2025 price increase notice. From January 20, the price of products in the truck and bus business line, light truck tires and off-road transportation business line in China and Mongolia will be adjusted by 3%-8%.

In 2025, foreign giants took the lead in opening the wave of tire price increases. It is foreseeable that more tire companies will soon take the opportunity to announce price increases one after another. After Bridgestone, Continental, Viking and Dunlop also announced price increases, Chinese tire company Sentury also issued a price increase notice on January 10: From February 1, the company's product prices will be increased by 3%-10%.

The 10% increase is tantamount to a heavy bomb for the market, directly blowing dealers and wholesalers to the factory gate - if they don't purchase now, the purchase price of a 16-inch tire after the new year may have to increase by at least ten yuan.

The purchase volume of wholesalers and dealers is usually thousands or even tens of thousands of tires. If they purchase in February, the purchase price of a truckload of tires may be more than ten thousand yuan. Therefore, dealers frantically call salesmen to place orders. Do you think only domestic dealers are so active? Overseas dealers are more anxious than Chinese dealers!

Export orders are stacking, tire companies are busy both overseas and domestically
Trump's second inauguration will be held on January 20, 2025, US time. As early as the end of 2024, Trump had announced that he would increase tariffs after taking office.

It is reported that Trump is preparing to increase tariffs to 60% in three years, and the fear of future purchase prices has also stimulated overseas dealers to rush to stock up.

This is also the reason why China's overseas tire bases have a higher operating rate. The General Tire mentioned at the beginning of the article, according to the production capacity of its Thailand base, its current operating rate is almost over 90%.

The first phase of the General Shares Thailand base project will be fully put into production in 2023, with a production capacity of 1.3 million full-steel tires and 6 million semi-steel tires; the second phase of the project will be successfully put into production at the end of June 2024, with an annual production capacity of 10 million semi-steel tires.

At present, the daily output of General Shares' semi-steel tires has exceeded 30,000, and all the production capacity in Thailand is effectively used. It is expected that the overseas factories of other tire companies will also be the same.

It is expected that the semi-steel tire operating rate of the 15 tire factories currently operated by Chinese tire companies in Southeast Asia should generally be above 80% - higher than that in China.

Raw material prices continue to rise, and tire factories are racing against time
It is also worth noting that the prices of raw materials such as natural rubber have begun to climb, and it seems that a return to the price of 19,000 yuan per ton has been foreseen.

Admittedly, natural rubber fell in the first week of January 2025, but starting from January 8, the price of natural rubber has been rising day by day. On January 15, the price has returned to the high point of 17,500 yuan per ton, 20% higher than January 2024, the highest price in the same period in 5 years.

In addition, oil prices are also rising in 2025, and 24:00 on January 16 is the time window for domestic oil price adjustment, which also means that the price of natural rubber will not only increase due to the reduction in supply during the tapping period, but will also enter a higher price range due to the increase in transportation costs.

While the cost has not yet "completely gone crazy", Chinese tire companies are racing against time and costs. With the recovery of transportation demand, overseas dealers scrambling for goods, and Chinese tire factories rushing to run, the operating rate of tire companies is naturally getting higher and higher under the pressure of three dimensions. It is estimated that in 2025, employees of tire factories will have to return to the factory on the third day of the Chinese New Year to rush to work!

It’s not a lie, hurry up and buy in. The operating rate of tire factories once again reminds all tire businessmen - hurry up and buy in! The tire business will not only face higher and higher prices in 2025, but also the embarrassing situation of placing orders but not having stock.

Because tires in overseas markets are sold at higher prices and have higher profits, many factories are currently focusing on supplying overseas market demand. In addition, the current large number of orders in overseas markets is also further occupying more factory resources.