Tire imports spike despite elevated duties

AKRON — With demand for tires in the U.S. ramping up in line with the recovering economy, pressure on the supply chain to keep pace is intensifying. Based on recently published statistics, it appears the industry's reliance on imports may be rising.

According to trade data published by the U.S. Department of Commerce, imports of passenger, light truck and medium truck/bus tires shot up by double-digits in the first six months of 2021, despite the imposition in January of elevated import duties on consumer tires from South Korea, Taiwan and Thailand.

These hefty increases are measurably greater than even the optimistic demand projections issued recently by the U.S. Tire Manufacturers Association (USTMA), indicating the import share of the U.S. tire market likely will increase this year.

It's worth noting as well that the pace of importing picked up considerably in the second quarter. In passenger tires, the jump was nearly 74%, a stark contrast to the first quarter, when imports essentially were unchanged from the first three months of 2020.

In the case of light and medium truck tires, shipments from overseas through June were rolling into the U.S. at rates — up 51.2% and 41.5%, respectively — that could yield record import levels.

At the same time, though, the effect of the antidumping and countervailing duties imposed on consumer tires from South Korea, Taiwan and Thailand is playing out clearly in the marketplace.

In passenger tires, overall imports increased 30.4% to 75.6 million units, but the relative strength of the key players is skewing quickly in favor of countries with lower tariffs.

By comparison, the USTMA projects that the U.S. passenger tire replacement market will grow roughly 10% this year to about 224 million units.

Shipments from Taiwan — where all but Cheng Shin Rubber Industry Co. Ltd. face antidumping duties of at least 84.75% — dropped 31.3% this year through the first six months and are down nearly 40% from their peak in 2019.

Among the tire makers hit with the elevated duties are Federal Corp., Hwa Fong Rubber Industry Co. Ltd., Kenda Rubber Industrial Co. Ltd., etc. Nankang Rubber Industry Co. Ltd. was assessed a duty of 101.84%, while Cheng Shin/Maxxis International was assessed a lower duty of 20%.

As for others affected by the latest round of import duties, imports from South Korea dropped 3.1% from 2020 and are down 28% from 2019, whereas shipments from Thailand continued to grow, albeit at a slower pace than the overall market, 9.5% over 2020, and at a pace below that of 2019, the data show.

With imports from these three key sources on the wane, other sources are on the march forward.

Most notably, imports from Mexico doubled in the period under review and are up nearly 45% over 2019, to 9.54 million units.

This shift would indicate that the major tire makers Bridgestone Corp., Continental A.G., Goodyear (including Cooper Tire & Rubber), Group Michelin and/or Pirelli & C. S.p.A. — which control the vast majority of tire manufacturing capacity in Mexico — are tapping into their operations there to a greater extent than ever.

Tire Business reached out to all five companies, but none offered comments specific to the noticeable rise in shipments from Mexico.

Bridgestone did note that its passenger tire plants in Cuernavaca and Monterrey, Mexico, remain an "important part" of its tire supply pipeline for the entire Americas market, including the U.S., and said, "We continually adjust and refine our manufacturing output to meet demand and needs of our customers, ..."

India's JK Tyre & Industries Co. Ltd., through its ownership of the former Hulera Tornel, also is playing a role. JK established a U.S. sales/distribution arm in 2019 and has started marketing Mexican-built tires in the U.S.

Other changes of note in the trade figures: Imports from Malaysia, Chile and Canada were up markedly.

In all three cases, tires from these nations come from affiliates of companies with U.S. production: Continental and Toyo Tire Corp. in Malaysia; Goodyear in Chile; and Bridgestone, Goodyear and Michelin in Canada.

Imports from Vietnam, which was not assessed antidumping duties by the U.S. in the recently concluded investigation, rose 12.7% to over 5 million units.

In light truck tires, first-half imports jumped 51.2% to 17 million units,

Among the nations assessed import duties: imports from Taiwan nearly halved, dropping to 86,315 units, while shipments from South Korea and Thailand rose, 35.2% and 2.2%, respectively.

Imports from Vietnam, by contrast, doubled to 2.1 million units.

Other increases worth noting: Shipments from the Philippines (where Yokohama Rubber Co. Ltd. has a plant) nearly quadrupled; imports from China — which faces its own set of elevated import duties — tripled; and shipments from Mexico surged 135%.

As a point of reference: the USTMA is forecasting aftermarket light truck tire demand will increase roughly 13% to more than 37 million units.

In the medium truck/bus category, imports rose 41.5% to 8.74 million units.

The big gainers among nations exporting to the U.S. were Vietnam (up 100.9%), India (up 63.2%) and Thailand (up 56.8%).

Shipments from China — the former No. 1 in this category before the U.S. imposed elevated antidumping duties on it in early 2019 — fell 36.4% in the period and dropped 72% from the first half of 2019.

Shipments from Thailand account for over 40% of overall truck/bus tire imports.

The USTMA's forecast for the truck/bus tire aftermarket shows an improvement of nearly 15%, to 22 million units.

The average price of an imported passenger tire during the period was $48, up from a year ago while those for light and medium truck tires fell.