[Click eStock] "Global Tire Starts Well This Year... Focus on Hankook Tire and Nexen Tire"

Global tire sales have shown a clear recovery trend this year. On the 21st, Song Seon-jae, a researcher at Hana Securities, stated, "This year, global tire sales for both Original Equipment (OE) and Replacement Equipment (RE) increased by double digits."

[Image source=Pixabay]

According to Michelin data, global, European, North American, and Chinese OE sales in January this year increased by 18%, 2%, 8%, and 72% respectively compared to the same period last year, while RE sales increased by 10%, 4%, 9%, and 46% respectively during the same period.

Global OE sales have continued to increase for four consecutive months. RE sales have increased for five consecutive months. In particular, sales in China saw a significant rise due to the base effect caused by vehicle usage during last year's Lunar New Year period, along with RE sales. Researcher Song said, "Even excluding China's growth rate, OE sales in Europe and North America increased due to automakers' inventory accumulation, and RE sales rose due to normalization of distributors' inventory levels, indicating a clear recovery."

As of mid-month, the price of natural rubber was $2,138 per ton, up 2% from the previous month and 15% compared to the same period last year. The price of synthetic rubber was $1,610 per ton, showing a 3% increase from the previous month and a 5% decrease compared to the same period last year. The prices of butadiene and styrene, raw materials for synthetic rubber, changed by 7% and 6% compared to the previous month, and -6% and 2% compared to the same period last year, respectively.

The Shanghai Containerized Freight Index (SCFI), a measure of transportation costs, rose to 2,166 points as of mid-month, showing a 2% change from the previous month and a 117% change compared to the same period last year. Researcher Song analyzed, "Since both overall raw material costs and transportation costs have increased, it is expected that tire manufacturers will face higher input costs from the second quarter onward." He also said, "It is necessary to observe whether the increase in volume will offset the weakening profit momentum by narrowing the price gap between selling prices and costs in the second half of the year."

Stocks to watch include Hankook Tire (target price 60,000 KRW, previous closing price 56,400 KRW) and Nexen Tire (11,000 KRW, 8,760 KRW).