Marketwatch recently reported on continuing OTR tire shortage (some call an “imbalance”). The article spoke about the on-going expansions by Michelin and Bridgestone and their struggle to keep up. The fact is that a booming commodity market will not allow them to catch up the imbalance.
No one is expecting a downturn in demand for mined products, so industry experts expect the chronic shortage will continue. Yoichi Nagamatsu, senior manager for Bridgestone’s off-road tires operations in Europe, acknowledged that tiremakers were caught with excess capacity when mining activity dropped at the beginning of this decade. “But today, the mining business is booming. Even with a 40% capacity increase, we think it’s still not enough.”
Interesting to note that since the start of the shortage in 2004/2005 predictions for the end of the supply imbalance have stayed steadily 2 to 3 years in front us. Maury Taylor recently predicted in his keynote address at the OTR Tire conference in Hawaii that by mid-2009 Titan’s new capacity would effectively end the shortage. I can still hear the echo of the cheers coming from the mining community after Mr. Taylor’s motivational address.
Hope springs eternal….