Production of large, heavy-duty tyres for earthmoving and mining equipment will continue to fall behind demand for at least the next couple of years, according to tyre manufacturers.
A comment recently attributed to Goodyear, US-based manufacturer of earthmoving equipment tyres, says every large tyre likely to be produced in 2006 is already sold.
It is understood that Michelin is in slightly better shape than Goodyear as far as production and supply is concerned.
This is as a result of heavy investment over the past three years that has increased production from its factories in France and in other tyre production centres it operates around the world.
Indeed, Michelin says it will invest US$85m over the next five years at its earthmover tyre production facility in Lexington, South Carolina.
The company says the expansion will increase production at the facility by nearly 50% … by 2010.
Marathon Tyres, which distributes and services Michelin heavy-duty off-road tyres in Australia, says it has “experienced a strong trading performance during the half year principally due to the high level of activity in the mining sector”.
Alesco Corporation, owner of Marathon Tyres, says increased demand from China for resources has forced up the raw material price for rubber.
The shortage of heavy duty earthmoving tyres may have less impact on major mining sites with long or fixed term tyre supply contracts than on mining contractors (although Australian Mining understands HWE Mining may be an exception) and newer or start-up mining operations.
Bridgestone Corporation supplies between 35% and 40% of global demand for mining equipment tyres and says its entire production of tyres for large and giant earthmover tyres is committed to existing customers for 2006.
Bridgestone Earthmover Tyres marketing executive manager Bruce Connor says to the best of his knowledge this also applies to its competitors.
“We anticipate a similar level of tyre production for 2007 and, therefore, it is safe to say that production for 2007 is also fully committed,” Connor says.
“We are forecasting that there will be no increase in large tyre supply until early 2008 when a number of tyre manufacturing factory capacity upgrades, including Bridgestone’s, will come on line,” he says.
Bridgestone will complete the upgrade of its large tyre manufacturing plant at Shimonoseki in Japan in early 2008 that will provide a boost in tyre production.
“We will shortly complete an upgrade of our Hofu plant in Japan, which will allow us to increase output of small and medium sized OTR tyres from late 2006.”
Connor says with at least two years until the tyre supply situation eases, close attention to tyre management is essential.
“Improved tyre management is a critical factor in maximising tyre life, so as to keep tyre demand to manageable levels,” Connor says.
Bridgestone Earthmover Tyres is currently unveiling a “smarter tyre management” program as part of its efforts to help customers manage the tyre shortage.
“Bridgestone’s experience in OTR tyre development, design, manufacturing and application gives us an excellent understanding of tyres and how to assist customers to maximise tyre life.
“For example, we can provide guidance under a given set of operating conditions and advise how to change parameters to significantly extend tyre life and improve operating safety,” he says.
The smarter tyre management program has a number of tools and services to extend tyre life and improve tyre management, including: advanced data analysis methodology on tyre performance; site-specific tyre advice based on local conditions and performance characteristics of the tyres; training programs for management and operators on tyre application and extending total tyre life; training classes on safe tyre care and tyre handling programs; and a network of OTR tyre repair facilities.