‘Other' tire specialty imports rise again

AKRON—Imports of specialty tires—agricultural, construction, earthmoving, industrial, recreational, trailer, motorcycle, etc.—increased last year by double digits over 2021 in nearly all the key categories, reflecting healthy business development in those sectors of the economy.

Since a relatively high share of tires in the "other tires" sector sold in the U.S. are imported, tracking import trends is considered a valid barometer of overall sector activity.

Overall, the value of specialty tire imports tracked by Tire Business totaled $3 billion in 2022, up 18.6 percent over 2021, which in turn was up nearly 25 percent over 2020, according to this publication's analysis of the available Commerce Department data.

By comparison, the value of the primary on-highway tire segments (passenger, light truck, medium truck/bus) shot up an unprecedented 54.9 percent over 2021, to $19.6 billion. Much of the gain can be attributed to the medium truck/bus tire category, where units imported jumped 37.9 percent and the corresponding value rose 45.2 percent.

The largest single category among the "specialty" tire types is ST-type trailer tires, which last year totaled 32.8 million units, down 18.1 percent from 2021. The declared customs value was down slightly, to $983.6 million, which reflects a higher per-tire value of $30, up 21.3 percent over 2021.

The next largest categories, in value terms, are:

• Construction/earthmoving tires, 24-inch rim diameters and larger, up 48.5 percent over 2021 to $561 million. Unit shipment rose 43.4 percent to 359,838, and the average value more than doubled to $1,559.47.
• Treaded (herringbone) agricultural tires, valued at $446.6 million, up 46.3 percent over 2021. Unit shipments increased 25.9 percent to 1.06 million, and the average value shot up 16.2 percent to $420.58.
• Solid tires, valued at $257.9 million, up 21.3 percent over 2021. Unit shipments were off 20.6 percent to 5.04 million tires, and the average value jumped nearly 53 percent to $51.19.
• Agricultural implement tires, at $182.9 million. Unit shipments surged 122.6 percent to 3.33 million tires, with an average value of $54.91.

Despite being No. 1 in only two specialty tire categories—agricultural implement and ST trailer tires—China is the largest player overall in the specialty tire category, accounting for $867.8 million, or nearly 29 percent, of the $3 billion in import value reported last year.

India is No. 2 at $573.4 million, with over 60 percent of the total coming from the treaded agricultural tire category, where it's the largest source of imported farm and forestry drive-axle tires. Thailand is No. 3 with $260.2 million, followed by Japan and Sri Lanka at $241.2 million and $220.3 million, respectively.

Among Indian companies active in the farm drive tire sector are Balkrishna Industries Ltd., CEAT Specialty Tires, Mahansaria Tyres Ltd., Speedways Rubber Co. and Yokohama Rubber Co. Ltd.'s OHT business unit.

This sector has the most significant domestic counterpart, as Bridgestone Americas Inc., Carlstar Group L.L.C., Titan International Inc. and Specialty Tires of America all produce farm/forestry tires in the U.S.

Titan, for one, is reaping the benefits of a strong U.S. agricultural sector. The company's fiscal 2022 sales jumped 21.8 percent over 2021 to $2.17 billion, helping to more than double income from operations, raising the operating ratio nearly five points to 9.5 percent.

Titan CEO Paul Reitz noted in January that an encouraging sign for Titan in 2023 was that farmer income remains healthy globally, with grain markets that are well supported by strong supply and demand economics.

In addition, Reitz pointed to U.S. Department of Agriculture reports that showed the corn and soybean supply-demand would support current pricing into 2024, at a minimum, which should help influence farmers' decisions to purchase new equipment and drive robust aftermarket tire sales.

By mid-year, though, Titan had scaled back its 2023 expectations as sales trailed forecasts due to elevated inventory levels at customers in the Americas, particularly OEM customers. The lower first-half results prompted Titan to revise its 2023 outlook downward by roughly 12 percent, to roughly $1.85 billion to $1.9 billion.

As for imports of treaded ag/foresty tires, Thailand is a distant No. 2, but together India and Thailand account for nearly 70 percent of such imports.

The U.S. Tire Manufacturers Association does not publish shipment data on agricultural tires, so it's not possible to make direct comparisons.

India's measurable presence in the U.S. off-highway tire sector comes despite import duties imposed on new pneumatic OTR tires up to 39 inches in rim diameter and designed for use principally on vehicles and implements in the agricultural, mining and construction, and other industrial sectors.

The duties imposed—and reconfirmed earlier this year—are considered relatively insignificant: antidumping of 3.67 percent industrywide and countervailing duties of 4.72 percent to 5.36 percent on specific companies.

Easily the most notable change of the past year was Yokohama Rubber Co. Ltd.'s acquisition of Trelleborg Wheel Systems (TWS), adding a wide range of agricultural/forestry and industrial tires to the portfolio of OTR (earthmover, construction, port, materials-handling, etc.) tires it already had.

The deal—which had been under way for over a year when it was concluded in May—brought Yokohama its first North America production capacity in the off-highway sector: the former Mitas Tires factory in Charles City, Iowa, and the Trelleborg Wheel tire plant in Spartanburg, S.C.

This alignment will help support Yokohama-TWS' "local for local" strategy, according to Paolo Pompei, the former TWS president who is now in charge of Yokohama TWS.

Yokohama, however, is keeping the two businesses separate, operating as Yokohama Off-Highway Tire (Alliance, Galaxy and Primex brands) and Yokohama-TWS (Cultor, Mitas and Trelleborg brands).

Prior to the completion of deal, Trelleborg Wheel reported 8.1 percent higher sales or $348.6 million in the quarter ended March 31, thanks in part to a "favorable market trend" in North America and in the global OE agricultural tire business for the sales increase.

For those companies handling forklift and/or solid tires, a recent market study by Data Bridge Market Research projects that demand for battery-driven electric forklifts will grow nearly 8.5 percent annually through 2029, based in part on the adoption of more efficient lithium-ion batteries.

Demand will be higher in Europe, the study said, because of new regulations calling for more sustainable and recyclable batteries.

The study also said pneumatic tire-shod forklifts will continue to have the largest market share during the forecast period, with demand throughout the Asia-Pacific region dominating new orders, due to the preponderance of large construction, mining, heavy machinery, and marine freight industries in this region.

Turning back to the U.S. import scene, after China and Inda, other leading trading partners in the specialty tire categories overall are: Thailand, $260.2 million (up 19.3 percent); Japan, $241.2 million (up 52.5 percent); Sri Lanka, $220.3 million (up 24.2 percent); Vietnam, $215.2 million; and Taiwan, $159 million (up 31.4 percent).

Looking at some of the individual tire sectors, the Commerce data show:

• Imports of solid tires fell 20.6 percent from 2021 to 5.04 million units and valued at $257.9 million. Sri Lanka and China dominate this category, accounting for 84 percent of overall imports.
• China continues to dominate the ST-type trailer tire category, accounting for nearly eight out of 10 ST tires imported. The per-tire value ranges from $27.94 for China to $38.26 for Taiwan.
• Imports of motorcycle tires grew 3.3 percent over 2021, which in turn was up 16 percent over 2020.

Japan, Indonesia and South Korea are the three leading country sources of imported motorcycle/scooter tires, accounting for 45 percent of the 3.87 million units shipped in last year. The average value was $48.13, with a range of $26.89 for Serbia to $93.19 for Germany.

Sumitomo Rubber North America Inc. is the sole U.S. producer of motorcycle tires, at its factory in Tonawanda, N.Y.