KORTRIJK, Belgium—China's tire industry boosted production of truck tires in the first quarter “in anticipation of new U.S. import duties and increasing raw material prices,” steel cord producer N.V. Bekaert S.A. reported in its first quarter trading update.
The U.S. is considering imposing countervailing and/or antidumping duties on truck tires from China, in response to a petition earlier this year from the United Steelworkers. This week, The Department of Commerce delayed its ruling on the duties petition until Aug. 26.
In the trading update, the Belgian steel tire cord maker reported strong organic volume growth in tire cord and increased market share in Chinese tire markets. Bekaert said it does not expect this effect to be repeated in the second half of the year.
“For several months there have been rumors and announcements of new import duties that will be imposed by the U.S. on Chinese tires,” Katelijn Bohez Bakaert's chief communications officer, explained in a subsequent written statement.
In any case, Bohez said, the situation “has created a boost in demand by U.S. distributors. The Chinese tire industry benefited by high export demand by U.S. tire importers/distributors buying from China before the duties on Chinese truck tires.”
Another positive factor for Bakaert has been a “sudden uplift” in its steel (raw materials) prices in China since April. Bohez said this has benefited selling prices for the group's tire cord products.
“So Chinese tire makers also may have pulled ahead some orders for tire cord to us, before the price rises,” she suggested, adding: “In the meantime, steel prices declined a bit again…so nobody knows how and where pricing will land.”