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January 22, 2007 01:00 AM

Predictions brighter for tire, tread shipments

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    WASHINGTON — U.S. tire and tread rubber shipments should increase this year over a disappointing 2006 performance, but the market won´t reach the level of 2005, according to the latest Rubber Manufacturers Association forecast.

    After falling about 4.5 percent last year to an estimated 306 million units, U.S. tire shipments should rebound somewhat in 2007 to roughly 310 million units, the RMA said. The association cites a shrinking gross domestic product, higher energy costs and a declining housing market for the falloff in 2006 shipments.

    The decrease reflects a worsening of the market as the year progressed. The RMA projected a 2.8-percent drop in August and a 1-percent increase back in March.

    The biggest changes are in passenger tires, with 2006 replacement units expected to fall 3.2 percent, to 196 million. Originally the RMA had expected 2006 aftermarket passenger tire shipments would grow to 206 million units. The association anticipates a modest rebound in 2007 to about 200 million units.

    Original equipment passenger tire demand also is falling. The latest forecast is for an 8-percent drop from 2005, to 48 million units, reflecting the decline in domestic light vehicle production, the RMA said. Demand in 2007 should be flat with 2006.

    Replacement light truck tire shipments should fall approximately 7.2 percent, or nearly 2.6 million units, to 33.4 million tires. The RMA lays that decline on the increasing popularity and numbers of crossover vehicles and smaller sport-utility vehicles that use P-metric passenger tires rather than light truck tires.

    OE light truck tire demand last year ended up at about 5 million units and will rise in 2007 by about 4 percent.

    Replacement commercial truck tire consumption will end 2006 about 2 percent behind 2005 at 17.2 million units, the RMA said, but should rebound this year by about the same amount to reach 17.5 million units.

    Shipments of OE commercial truck tires in ´06 were expected to hit 6.8 million units, a gain of nearly 9 percent, or 560,000 units. The RMA pointed to a significant growth of sales of commercial truck vehicles because of the continued vehicle replacement demand and changes in 2007 Environmental Protection Agency emission regulations.

    OE shipments this year probably will fall sharply — as much as 20 percent or approximately 1.5 million units — resulting from the "pulled-ahead" truck sales this year that normally would have been realized in 2007.

    Likewise, tread rubber shipments fell about 1.2 percent shy of 2005 as retreadable off-the-road tire casings proved difficult to find, and fleets bought new trucks ahead of 2007 emissions regulations, the RMA said.

    Continued economic growth sustained high demand for tread rubber, the RMA said, but the other two factors outweighed this momentum, pushing down the estimated number of units retreaded-15.7 million-nearly 2.5 percent from 2005.

    The RMA said tread rubber shipments should turn around in 2007, increasing about 1.3 percent.

    The 2006 totals mark the first decline in annual shipments after three consecutive years of shipment increases, the association said. The drop was in contrast to three earlier RMA bulletins that forecast a gain of as much as 2.8 percent in 2006 vs. 2005.

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