Tyre Prices May Increase Due to China’s Power Shortage

China is Asia’s largest economy and it has entered its first electricity supply shock. The shortage of power has been caused by the increasing demand and price for electricity, coal and gas. This hit has been on the industrial sectors which include from the tyre producers to textile producers, every industry of China is in this together. The factories have been told by the authorities to curb their activity or in some cases shut their operation.

Almost 11 of the provinces in China have missed energy intensity targets set by the authorities and now are under pressure to restraint power usage. The total power usage of the first two quarters was more than 16 percent from the last year, it was the highest of all the years.

The economy is at risk as there is a shortage going on at power and coal, which is initially used to heat the homes in the winter season. As the winter comes near the usage of the country will increase and the supply will be dropped. The industrial experts claim soon the global markets will feel the shortage of goods from tyres, machine parts to toys.

Power shortage impact on the Shandong Province

Shandong is the province where most of the tyres are manufactured, which is known as the capital for the rubber industry and if the crisis continues there will be a delay in the orders as the electricity is suspended and the production is interrupted. The prices of the tyres will likely increase as the demand will be increasing for the Chinese tyres in the global market. The result of this crisis will end up with increased tyre prices and delay in the delivery of tyres.

It is the best time to import as prices will be increasing very soon and the freight is also stabled for a short period of time. In the future, the prices will increase because of this power crisis and the freight will have a steep jump again due to the shortage of containers. A suggestion for the tyre importers to import as much as they can and to stock the maximum amount of tyres to survive the upcoming price increase.