Several factors indicate increased demand for tires in the specialty, industrial, agriculture and OTR segments. Infrastructure spending, increased mining for precious metals used in electronics and batteries, and high commodity prices are some reasons driving the trend.
The number of specialty tires imported last year — which make up a large share of the U.S. "other tires" market — increased by double digits over 2020 in all categories, according to data from the U.S. Commerce Department.
The U.S. farm tire market continues to enjoy strong sales.
"We've been in a period where the equipment in the field has aged and it's time to purchase new equipment. That has resulted in new equipment being sold with new farm tires," Tony Orlando, president of Firestone Ag at Bridgestone Americas Inc., said.
"Or in the aftermarket, you've got old equipment and now farmers can't buy new equipment (due to supply shortages), so they are extending the life as much as they can with existing equipment. Collectively, that is resulting in strong demand and year-over-year growth."
"The market for OTR tires often correlates with prevailing trends within the mining, construction and aggregate markets as a whole," Rob Seibert, president of Off the Road at Bridgestone Americas Inc., said.
"While mining commodity pricing remains historically strong, the industry continues to face headwinds in labor, parts, shipping and global economic volatility."
On a dealer level, low fill rates, increased prices and "sporadic demand" remain key challenges, according to John Ziegler Jr., vice president at Ziegler Tire & Supply Co.
The 103-year-old Massillon, Ohio-based company operates commercial outlets, retail stores, distribution centers and two retread plants serving customers in Ohio, Pennsylvania, Kentucky and West Virginia.
"This year has been a different kind of year as many major brand products have not been as available, and we have been selling more import product."
Ziegler said managing fill rates "has been 'whatever we can find, when we need it.'" He added that high prices "definitely opened the door" for more entry-level import brands to gain market share.
"It will be interesting to see when supply becomes more available how the Tier 1 and 2 pricing will be and how the lower tier products respond," he said, adding better "value" tires that are able to offer comparable performance will put pressure on higher-tier makers to lower prices.
For the rest of the year, Ziegler said, tire dealers and customers are waiting to see how pricing changes.
"We are going to be cautious with inventory both from a potential slowdown in business as well as possible lower pricing with freight surcharges being reduced or going away," he said.
The specialty market is heading in the right direction, but that doesn't mean the path won't be muddy along the way. Excess costs need to come down and the supply chain — a huge burden on those costs — needs to settle. We believe it will, hopefully sooner than later.
