Tire industry wary of "virtual fire"

Recently, the production of tire companies has rapidly improved, many companies have begun to operate at full capacity, and a number of new projects have started. However, according to statistics from 44 member companies of China Rubber Industry Association Tire Branch, from January to March this year, the amount of finished goods inventory rose by 4.5% year-on-year, of which domestic enterprises increased by 14.9%. Shen Jinrong, chairman of the China Rubber Association tire division, said in an interview with reporters recently: “This year, the price of natural rubber was roughly 13,000 yuan, and last year it was about 26,000 yuan, and the gap in the cost of finished products was nearly 20%. The increase in the amount of physical goods is considerable. At present, a prosperous scene is likely to be 'puffiness'. Increased inventories and declining profits are precursors to problems in the company's capital chain, and we must be vigilant."

Shen Jinrong said that originally thought that the amount of inventory should be reduced, but the report out is increasing, and at the same time the profits of many large taxpayers greatly reduced, when he got the report startled. He said: "In China's statistics, the inventory of finished products is based on the cost method, only raw materials and manufacturing costs, and inventory can not be digested depends on the amount of physical. Now the price of raw materials down, 100 million in liquidity, If you can only put 5 billion tires, you can now put 7 billion, so companies can now put or say that they can afford more inventory than before the financial crisis, but the market capacity is calculated according to the number of natural It's not based on value. A car still uses four tires. It won't use five on the basis of cheap materials."

“If the finished product is not sold, there is no way to do it. If the stock is large, it will occupy the liquidity of the company and the cash flow will slow down. The raw materials are bought in. If there is no money, they will not be able to enter you. Raw materials, coupled with the relatively poor capital mobility of Chinese companies, have caused large problems in capital inventories, which is a major problem, said Shen Jinrong.

So, what caused the massive rise in finished product inventories? According to Shen Jinrong, the first is excess liquidity, which makes it easier for companies to obtain loans and financing. Second, they are blindly optimistic about the situation and believe that the situation is now very good; The blind pursuit of high operating rates, whether or not there are orders for production at full capacity, it does not matter if the finished product inventory is high.

In the first quarter of this year, the increase in the inventory of tire companies, Cao Chaoyang, chairman of the chairman of Aeolus Tyre Co. He said that the United States' investigation into the special protection of consumer tires initiated by China shows that the international trade environment is deteriorating and domestic domestic demand cannot fully fill the market gap caused by the decline in exports. Tire enterprise stocks rise, the situation will be more difficult.

Cao Chaoyang said that from the global perspective, the IMF's expectations of the world economy and China’s economic outlook have been lowered, saying that the developed countries’ economies will decline at a rate of -3% to -3.5% in 2009, China’s The economic growth rate is also expected to be lowered to 6.5%. The old corporate giant Chrysler filed for bankruptcy protection. The Michelin Group released a 2009 report on the global tire industry some time ago. It is not optimistic about the prospects of this year's global tire industry.

From the domestic point of view, domestic new-currency loans in the first quarter of this year amounted to 4.58 trillion yuan, more than the total amount of new currency loans in any previous years. Premier Wen Jiabao’s work report stated that this year plans to add 5 trillion yuan in new currency loans, and has loaned 90% in the first three months. Whether the late-stage loans and money supply can keep up with is a problem. The sharp increase in the money supply, the expansion of fixed assets, and the total amount and scale of infrastructure construction may well indicate a surplus of liquidity. From the perspective of related industries, the output of the steel industry in 2008 was 5 trillion tons, and exports were 10%. The Secretary-General of the China Iron and Steel Association has publicly stated that it can only produce 4.3 trillion to 4.6 trillion tons this year. It seems that investment in the tire-related industries such as mining and automobile is not enough to make up for the decline in foreign markets.

At the same time, the international trading environment is further deteriorating. At the end of April, the United States suddenly filed a special safeguard survey on Chinese consumer tires. The export volume and export volume of tires in question accounted for 75% and 88% of China's total tire exports. The United States is the largest target country for tire exports in China, accounting for 37% of China's total tire exports, and 25% of exports, once special insurance is implemented. Restricting the total amount of tires that we export to the United States, China's tire exports will fall by about 6%. What is even more serious is that if the United States implements special safeguards, other WTO member states may implement special safeguard measures for exporting tires without consulting them at any time. Nearly 45% of China's tires are exported, and the decline in exports is a big hole. How much can the country pull to fill this hole? Cao Chaoyang said that the market situation in the second half of the year is not optimistic. The tire industry is now so-called good, to a certain extent, a false prosperity.

It is understood that the Ministry of Industry and Information Technology has approved a batch of projects some time ago, many of which are tire projects, and some of them are similar to existing products with excess production capacity. According to Tan Yukun, deputy secretary-general of the China Rubber Association’s tire division, it is necessary to prevent new overheating and blind investment. He believes that the global economic crisis is an external cause and that supply exceeds demand is the key to the tire industry. Expanding investment can stimulate domestic demand and create conditions for expanding exports. However, expanding investment only has practical significance on the premise of expanding domestic demand and expanding exports. Otherwise, expanding investment will take greater risks. Judging from the current situation, some regions and some enterprises are striving for national investment and are ready to continue to work fast. He hopes that these enterprises must be cautious and avoid low-level redundant construction.