The special safeguard duties imposed by the United States on Chinese tire imports will significantly affect profits at Chinese tire producers in the fourth quarter, TX Investment Consulting Co. said in a report released September 15.
TX said the tire makers will at the worst sales momentum after a surge in China's tire exports in the seven months to July due to stockpiling by some importers in the U.S.
In the first seven months, China's tire exports rose 52 percent year-on-year to US$3.64 billion, according to the official China Association of Automobile Manufacturers.
China's tire exports to the United States rose 122 percent to US$1.12 billion, or one third of the total supply in the US market.
TX added that China's tire exports will decline significantly in October, following the introduction of the special safeguard measures on Sept. 26.
US Trade Representative Ron Kirk announced on Sept. 11 that the United States will levy additional duties on passenger cars and light truck tires imported from China. The duty will be 35 percent for the first year, falling to 30 percent in the second year and 25 percent in the third.
Wu Ying, an analyst at Guodu Securities, said one consequence of the US action will be the oversupply of tires in China, raising competition among tire makers and exerting pressure on prices.
