Big-tire shortage big-time concern
Big-tire shortage big-time concern
State's contractors, miners affected
Max Jarman
The Arizona Republic
A global shortage of industrial tires threatens to put a damper on Arizona's booming construction and mining industries. Although contractors and miners say they have not yet had to idle equipment for lack of tires, they acknowledge it is a possibility. "It's looming on the horizon," said Shawn Rasey, director of off-road tire sales for Bridgestone Firestone Inc.
Used tires for mining rigs, which could be bought for $5,000 a year ago, now sell for $20,000 and up, and there are reports of new machinery being shipped to buyers without tires.
The shortage is expected to last until 2007, possibly longer. "The situation is serious," said Ken Vaughn, a spokesman for Phoenix-based Phelps Dodge Corp., the world's second-largest copper producer.
The simultaneous worldwide ramp up of mining, construction and military activities caught the tire industry off guard and unable to produce enough large tires to meet demand.
"It's a triple whammy," said Dave Wilkins, a spokesman for the Goodyear Tire & Rubber Co. in Akron, Ohio. "Normally, demand will increase from one sector but not all three at once."
The price of copper has doubled in the past two years, with coal, gold and molybdenum also showing huge gains. As a result, mining companies are pushing their mines to produce as much ore as possible to take advantage of the prices.
Massive construction programs in China and India are contributing to the soaring demand for tires, as is the war in Iraq. "China will buy every tire it can get," Wilkins said. He noted the production shortfall affects only large off-road tires, which are made by a limited number of companies at special facilities.
There is an ample supply of tires for passenger cars and trucks because demand has remained constant. "It's not a supply problem; it's a demand problem," Rasey said. Bridgestone Firestone is producing as many, if not more, tires as in the past, Rasey said, but demand is now far greater than supply.
Al Chicago, president of Purcell Western States Tire in Phoenix, has been in the tire business for 45 years and says this is the worst shortage he has seen. The Goodyear dealer is working to fill orders for existing customers but is turning new business away. "There's no way we can take care of them," he said.
Bridgestone Firestone also has initiated a moratorium on new business. For contractors such as road builder Pulice Construction Inc. in Phoenix, a tire shortage comes on top of shortages of concrete, steel and oil for asphalt. "All the materials suppliers are maxed out," Pulice President Steve Basila said.
Pulice is building several sections of Loop 202 in the southeast Valley and so far has not been slowed down by a lack of tires.
Arizona Department of Transportation spokesman Doug Nintzel said the agency also has not experienced any shortages. But Chicago predicts it's just a matter of time before equipment is sidelined for lack of tires. "If they're not hurting now, they will be later," he said. "It could get a little ugly in another year."
Goodyear and other tire makers are expanding production capacity, but it is not expected to help ease supply until 2007. "Every tire we produce is spoken for through 2006," Wilkins said.
Like other dealers, Purcell has been put on rations by the manufacturers. Chicago estimates the company will sell 10,000 off-road tires this year and could sell twice that if they were available. "I can sell every tire I can get my hands on," he said.
Equipment manufactures also are in a bind. Peoria, Ill.-based Caterpillar Inc. is substituting more-available bias-ply tires for radials on some machinery and is considering equipping others with retreads instead of new tires. Occasionally machinery is shipped without tires, leaving the buyer to secure the rubber.
"It's an industrywide challenge," Caterpillar spokesman Jim Dugan said. The huge tires used on the giant trucks that haul ore out of Arizona's copper mines are in particularly short supply.As a result, mining companies such as Phelps Dodge, Asarco Inc. and Peabody Energy are scrambling to keep their trucks moving and production on track. They have increased driver training, stepped up road maintenance and reduced driving speeds to eke a few more miles out of their tires.
see the rest of the story here: http://www.azcentral.com/arizonarepublic/business/articles/0617tires17.html
Find OTR Tires Here: www.otrtiredepot.com
State's contractors, miners affected
Max Jarman
The Arizona Republic
A global shortage of industrial tires threatens to put a damper on Arizona's booming construction and mining industries. Although contractors and miners say they have not yet had to idle equipment for lack of tires, they acknowledge it is a possibility. "It's looming on the horizon," said Shawn Rasey, director of off-road tire sales for Bridgestone Firestone Inc.
Used tires for mining rigs, which could be bought for $5,000 a year ago, now sell for $20,000 and up, and there are reports of new machinery being shipped to buyers without tires.
The shortage is expected to last until 2007, possibly longer. "The situation is serious," said Ken Vaughn, a spokesman for Phoenix-based Phelps Dodge Corp., the world's second-largest copper producer.
The simultaneous worldwide ramp up of mining, construction and military activities caught the tire industry off guard and unable to produce enough large tires to meet demand.
"It's a triple whammy," said Dave Wilkins, a spokesman for the Goodyear Tire & Rubber Co. in Akron, Ohio. "Normally, demand will increase from one sector but not all three at once."
The price of copper has doubled in the past two years, with coal, gold and molybdenum also showing huge gains. As a result, mining companies are pushing their mines to produce as much ore as possible to take advantage of the prices.
Massive construction programs in China and India are contributing to the soaring demand for tires, as is the war in Iraq. "China will buy every tire it can get," Wilkins said. He noted the production shortfall affects only large off-road tires, which are made by a limited number of companies at special facilities.
There is an ample supply of tires for passenger cars and trucks because demand has remained constant. "It's not a supply problem; it's a demand problem," Rasey said. Bridgestone Firestone is producing as many, if not more, tires as in the past, Rasey said, but demand is now far greater than supply.
Al Chicago, president of Purcell Western States Tire in Phoenix, has been in the tire business for 45 years and says this is the worst shortage he has seen. The Goodyear dealer is working to fill orders for existing customers but is turning new business away. "There's no way we can take care of them," he said.
Bridgestone Firestone also has initiated a moratorium on new business. For contractors such as road builder Pulice Construction Inc. in Phoenix, a tire shortage comes on top of shortages of concrete, steel and oil for asphalt. "All the materials suppliers are maxed out," Pulice President Steve Basila said.
Pulice is building several sections of Loop 202 in the southeast Valley and so far has not been slowed down by a lack of tires.
Arizona Department of Transportation spokesman Doug Nintzel said the agency also has not experienced any shortages. But Chicago predicts it's just a matter of time before equipment is sidelined for lack of tires. "If they're not hurting now, they will be later," he said. "It could get a little ugly in another year."
Goodyear and other tire makers are expanding production capacity, but it is not expected to help ease supply until 2007. "Every tire we produce is spoken for through 2006," Wilkins said.
Like other dealers, Purcell has been put on rations by the manufacturers. Chicago estimates the company will sell 10,000 off-road tires this year and could sell twice that if they were available. "I can sell every tire I can get my hands on," he said.
Equipment manufactures also are in a bind. Peoria, Ill.-based Caterpillar Inc. is substituting more-available bias-ply tires for radials on some machinery and is considering equipping others with retreads instead of new tires. Occasionally machinery is shipped without tires, leaving the buyer to secure the rubber.
"It's an industrywide challenge," Caterpillar spokesman Jim Dugan said. The huge tires used on the giant trucks that haul ore out of Arizona's copper mines are in particularly short supply.As a result, mining companies such as Phelps Dodge, Asarco Inc. and Peabody Energy are scrambling to keep their trucks moving and production on track. They have increased driver training, stepped up road maintenance and reduced driving speeds to eke a few more miles out of their tires.
see the rest of the story here: http://www.azcentral.com/arizonarepublic/business/articles/0617tires17.html
Find OTR Tires Here: www.otrtiredepot.com
Labels: earthmover tire, Michelin OTR, otr shortage, OTR Tire
posted by Arnold Cortez at 7:27 AM
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