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April 19, 2017 02:00 AM

Chinese casings worry retreaders

Miles Moore
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    WASHINGTON—The International Trade Commission vote not to impose countervailing and antidumping duties on Chinese truck and bus tire imports are hurting the U.S. in more ways than one, according to retreaders and rubber recyclers.

    Retreaders remain concerned over competition from low-priced Chinese truck and bus tires, which they feel only will increase now that the threat of duties has been removed.

    "Chinese imports have already seriously impacted my business," Terry Westhafer, president of Verona, Va.-based Central Tire Co., said at the time of the Feb. 20 vote. "If this situation persists, the Chinese will just open the spigots full blast."

    However, other issues besides competition are raising concerns within the retreading and recycling industries.

    First, according to retreaders, the casings from low-cost Chinese truck and bus tires are of varying quality and often completely unretreadable.

    Second, recyclers claim scrap Chinese truck and bus tires are a glut on the system, piling up faster than they can be processed or sent to end-users.

    "Chinese tires come from very different areas and factories, but by and large retreaders are reluctant to retread them," said Bob Lanpher, general manager of the Commercial Division for Monro Muffler Brake Inc.

    The problem, according to Lanpher, is that low-end Chinese truck and bus tires just aren't built for retreadability.

    "Retreading is one of the largest green industries out there," he said. "A top-tier tire can last 700,000 miles. An end-user looks at casings as an asset to the organization."

    The ITC vote "absolutely" has made the situation worse for retreaders, according to Lanpher.

    "Retreading was just starting to pick up when the ITC vote came down," he said. "We're obviously concerned. I don't think they really considered the whole cradle-to-grave life of a casing."

    Lanpher said he will not retread a Chinese casing. Westhafer said he will not retread any Chinese casing brought in for credit.

    "If a customer brings me a Chinese casing and it meets our standards, we will retread it and send it back to the customer," he said.

    Westhafer said he sees "a moderate quantity" of Chinese casings in his area of Virginia, "nothing like the West Coast or Florida."

    He added that he rejects certain brands as unretreadable, whereas others he will accept based on age and condition. But customers are starting to object to casings sourced from China, even when they bear a non-Chinese brand name, he said.

    "We're a Hankook dealer," he said. "We get great tires from them, but some of their tires are now coming from China instead of South Korea. Our customers may accept them, or they may not."

    In any case, Chinese imports have not been good news for Westhafer. "They've affected 30 percent of my business, and it's just going to get worse," he said.

    Because Chinese casings are increasing in the market, retreadable casings are becoming scarcer, according to Richard Gust, president of national accounts at Liberty Tire Recycling. "Retreaders suffer, and the price of casings can go up," he said.

    For Gust's business, however, the major problem with Chinese truck and bus tires is the overabundance of scrap tires that must be processed.

    "We had to raise our prices for accepting tires," he said. "There is an overflow of scrap tires coming in—more tires than we can process.

    "Suddenly you have an influx of scrap tires, and that puts pressure on that market," Gust said. "If you turn them into crumb rubber, you have to reduce your price for crumb rubber.

    "For us to handle more scrap tires, we have to raise prices to those who generate them," he said. "There is always pressure on dealers to find alternatives that are less expensive, and that could lead to environmental problems. Large companies do the right thing, because they understand the economics. Smaller companies need a lot more salesmanship to do the right thing, because they have tight budgets and might be in areas that allow landfilling."

    There are rumors that Chinese tires may have higher contents of aromatic oils and other substances that might make them less desirable for use as crumb rubber infill for athletic turf, but those have not been substantiated, Gust said.

    "We have thoroughly tested mainstream tires, and we know their content," he said. "We as an industry are concerned about any health situation, and the Chinese tires are being evaluated now."

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