Any Chance Left for China's Large Engineering Tire Producers?     

Beginning from 2004 a shortage of larger engineering tires for ultra-large mining dump trucks was more acute with each passing day, and the market demand became stronger and stronger. However from the beginning of 2006, with large quantities of big cross-ply engineering tires for mining dump trucks brought to the market, all from China's large engineering tire manufacturers, the shortage was relieved. Then, at the end of 2006, with some exceptions, the tight market for large engineering tires for mining dump trucks was finished. During this round of market adjustments a great many large cross-ply engineering tire producers sprang up in just two years. Today, in the present fast changing market, grasping opportunities is a primary matter for the large engineering tire makers, according to Zheng Xianqun, manager of China Haohua Group South (Guilin) Rubber Co., Ltd.


Radial large tires
are the mainstream

Large engineering tires are mainly used for huge trucks used in mines. While 95% of mining dump trucks are driven in open-air mines, the others are used in stone pits and construction sites, so large engineering tires mainly meet the transport requirements in open-air mines. The service the large engineering tire producers offer is to satisfy the lowest transport cost, moving the maximum volume of minerals at the lowest environmental costs and in the shortest period of time.  
    The mining dump trucks tend to be ultra-large - trucks with a payload of above 220 tons made up 40% of the yearly sales volume of mining dump trucks in 1998. Through nearly 10 years of use and sifting the large mining dump trucks of payload beyond 190 tons have dominated on the market, and their 57 inch tires are a mainstay of the tire market. Also sales of 57 inch and 63 inch tires have climbed. Many manufacturers who want to break into making large all-steel radial tires for mining dump trucks start with 57 inch tires. Michelin and Bridgestone expanded their production with these two types as their first choices.
   Because of the longer life-span of radial tires in use - 30-40% longer than cross-ply tires - low operational cost per hour or per kilometer, and low oil consumed, radial tires are the first choice for users. Compared with the large cross-ply engineering tires the radial ones have more complicated processing techniques, require more expensive manufacturing facilities and have much higher technical requirements. Michelin, Bridgestone and Goodyear were the first ones to produce radial engineering tires, and just produce the main sizes. In the beginning of 2004 the three giants of tire makers held 95% of the medium-to-large tire market for mining dump trucks in China, but other engineering tire manufacturers from India, Europe and Malaysia, and especially China are reducing the market shares of the three giants. But presently only Michelin and Bridgestone can produce the largest tires for dump trucks - for the ultra-large transport trucks with a payload of 270 tons. The sizes range from 50/90R57 to 59/80R63, with 59/80R63 the largest one presently used. Only Michelin and Bridgestone, the worldwide two largest producers that occupied the majority share of the tire market, own the technology and capability to manufacture the 63 inch radial tire for mining dump truck.


Market deficiency
creates opportunities

In 2003, with fast rising prices of metal and coal worldwide, large engineering tires for mining dump trucks ran into a supply crisis, and the huge and rapidly increasing demand took the global tire giants by surprise. According to Li Dongping, director of the board of China Haohua South (Guilin) Rubber Co., Ltd., "Michelin, Bridgestone and Goodyear went into high gear but were not in a position to meet the demand." Manufacture of a large engineering tire can be extremely slow. Some types even take a whole day for one tire to be done. So even if all the global manufacturers of large engineering tires went into 24 hour a day operation, it would still be difficult to bring their goods to market to meet the demand in a short period of time.
    Because of going out of stock, the prices of large engineering radial tires shot up. As briefed by Cheng Yuan, professor of Beijing University of Chemical Engineering, the import prices of a 36.00R51 radial engineering tire climbed from RMB57 000 to RMB200 000 this year and that of 40.00R57 tires rose to RMB270 000. It was reported that the price of 36.00R51 size inner tire-free all steel tires went up to US$35 000 a piece (RMB280 000), and what is more, some are priced US$40 000 a piece (more than RMB300 000). Professor Cheng pointed out such kinds of large engineering tires are high priced, short lived and sell in huge quantities.  
   Tires giants like Michelin have made a tremendous profit here. According to specialists one 36.00R51 tire priced at US$35 000-US$40 000 costs only US$20 000 to make. China alone imports 8 000 - 10 000 large radial tires for mining dump trucks per year.
   Faced with such an attractive market, China's tire manufacturers are anxious to have a go. China Haohua South (Guilin) Rubber Co., Ltd. initiated a 10 000 set/a large radial tire project in 2006. This should have been the first one for large radial engineering tire manufacture in China, with a total amount of investment of RMB 600 million, scheduled for completion in September 2007, but was not smoothly done. The 2 550 piece per year production line jointly constructed by Beijing Research & Design Institute of Rubber Industry and Fujian Haian Rubber Co., Ltd. was put into operation in June 2007. The former provides soft techniques and shapers of key equipment while Haian supplies plant buildings. The project required a total investment of RMB318 million. Up to June 2007, there are 12 local manufacturers that have announced plans to enter the production ranks for radial tires of 49 inch or above, including Shifeng Double-Star Tire Co., Ltd., Shandong Triangle Group, Shandong Hong Yu Rubber Co., Ltd., Shandong Taishan Tyre Co., Ltd., Shandong Xingyuan Tyre Group, Shandong Wanda Baotong Tyre Co., Ltd. and Fujian Haian Rubber Co., Ltd. It is estimated that most of the construction will be completed in the second half of 2008 or in 2009


Domestic large tire projects expected to be developed

At the end of 2003 the supply of large engineering tires was in a crisis globally, and the tire manufacturing industry had not actually yet initiated large tire projects in China. Until 2005, when the supply for large engineering tires began to be on strained even further, some of domestic producers began large cross-ply tires expansions. From 2006 China turned out to be a new emerging force of manufacturing large tires for mining dump trucks. Large amounts of domestically made large cross-ply tires relieved the shortage of large engineering tires. But at the same time the quality of these tires was questioned. Also China's producers of large cross-ply engineering tires met competition from Belshina from Belorussia, Eurotyre from Ukraine and Yokohama from Japan.
  According to incomplete statistics China has more than 25 makers capable of producing tires of 49 inches or above with an average capacity of at least 20 pieces per day. The 57 inch tires that are in such short supply have come out from the large-tire producers in China. By June 2007, there were at least 12 makers capable of producing tires of 57 inch or above, with three of them able to produce 63 inch cross-ply tires.

   These large-tire makers all have the following features:
    1. Most of the factories have no experience of manufacturing semi-steel or a