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Why tires, tubes and wheels are becoming more expensive and there is a shortage of tires.
Why tires, tubes and wheels are becoming more expensive and there is a shortage of tires.
Since the beginning of this year, there has been a steady rise in prices in international raw material markets, as well as a sharp rise in logistics costs.
Rubber and other components
World rubber prices in March reached the highest level since 2017, at 2 US dollars per kilogram. Experts believe that by 2025, the price of rubber could rise to $ 5 per kilogram. Despite rising prices, experts predict a possible shortage of natural rubber due to natural factors in producer countries, supply problems, as well as producers' efforts to purchase raw materials, without waiting for the situation to worsen. Prices for other components used in the manufacture of tires and tubes, including synthetic rubber, are also rising sharply, due to higher prices for steel, oil and refined products.
Steel
World steel prices reached their highest level in 12 years this year.
Transportation
At the end of last year, demand for container traffic between China and the United States increased and export demand from the United States declined, leading to a shortage of containers and ships both in that direction and globally. The shortage of containers and seats on transport vessels has created a global crisis and significantly increased sea container tariffs. As late as December 2020, the cost of transporting a container with a relative average value of USD 35,000 was 10-13% of the value of the container, but by June 2021, these costs had risen to 30-40% of its value. According to the logistics operators, no significant changes in transportation costs are expected in the short term.
The above factors have led all world tire, tube and disc manufacturers to be forced to increase the prices of their products in an effort to compensate for rising raw material costs and the sharp rise in maritime tariffs in order to maintain production profitability. Some companies have already increased their prices several times during the year, and it is quite possible that the prices of these products will continue to increase.
The situation makes price adjustments inevitable, including on the part of our company, but we will continue to offer our customers the best value for money on the market, as well as the constant availability of products in our warehouses. As soon as the situation in the container transport market returns to normal, we will certainly respond with an appropriate price adjustment.