Many experts now think and believe that the world is heading toward a recession. However, that has not affected the prices of Chinese tires. As of now, raw material and finished goods supply chains are working rapidly and emerging from historic bottlenecks. This has finally given Chinese tyre manufacturers an excellent opportunity to supply tires to companies and tyre importers all over the world.
However, the war in Ukraine has led to sharp increases in fuel prices. This has resulted in a corresponding freight increase as far as Chinese tyre price is concerned.
Supplies Struggling to Meet High Demand
The Truck Tonnage Index (TTI) shows the total amount of gross tonnage moved by trucks per month. Since it is registering a global increase, tyre demand has also increased. Increasing demand with lower tyre supply due to an increase in crude oil prices has led to higher manufacturing costs along with higher freight charges.
Synthetic rubber is a primary raw material that is used to manufacture tires. Crude oil is also used as a critically important raw material.
Both of these factors combined have also served to increase the Chinese tyre price. Add to that the fact that steel prices have also increased, as have other material costs in China.
The Impact of the War in Europe
The conflict in Europe has had a massive impact on global freight prices. This, in turn, has led to a domino effect on the whole of the supply chain. Apart from that, many Chinese tire manufacturers have to take global inflationary trends into account. They are now facing high labor costs as prices of most commodities have increased.
Conclusion
The prices of raw materials and labor are both affected by the high fuel prices since it affects everything ranging from the transport of labor, raw materials, manufacturing process, and ultimately freight charges as well.
Many, if not most of the famous tire manufacturers in China are directly affected by these trends. All of these factors have combined, and this has resulted in a culuminative increase in the prices of Chinese tyres.
