Tuesday, September 18, 2012

HSM at MINExpo in Las Vegas - Sept 23-26

Come see us Sept 23-26 at MINExpo in Las Vegas.  We will be located at booth #28116 in the South Hall.  Products on display will be the Sleipner – Excavator Transport System along with our new TireLink – Tire Pressure Equalization System.

 We look forward to seeing you there!

Thursday, September 29, 2011

China Growth, Japan Production Create Strong Tire Demand

China's auto sales and Japanese vehicle output have climbed, boosting global demand for tires and rubber.
Record demand for vehicles in China – the world’s largest market – and the biggest increase in Japanese vehicle production in three decades means tire manufacturers are poised for record sales, reigniting a rally in rubber prices, according to a report by Bloomberg.

China’s vehicle sales exceeded the combined global total of General Motors Co. and Volkswagen AG, the world’s top two automakers, in the first half, and Japanese output more than doubled in three months as factories reopened after the March earthquake. Tire demand will shrink rubber stockpiles to 12% of use in 2012, a four-year low, estimates Citigroup Inc. Prices may jump 18% to $5 a kilogram (2.2 pounds) by Dec. 31, a Bloomberg survey of 15 analysts and traders shows.

According to JD Power & Associates, growing vehicle sales in China and other emerging markets will compensate for weakening demand in developed economies roiled by debt crises, giving carmakers their best year ever. After the March 11 earthquake and tsunami, Japan’s vehicle production collapsed to its lowest level since at least 1982. But that output is now resurging and reached 790,325 vehicles in July, about 1% less than in February, Bloomberg reported.

JD Power estimates that global sales of cars and light commercial vehicles will rise 4% to 75.4 million units this year, and a further 10% to 83.3 million in 2012. Tire purchases will increase 6.5% to an all-time high this year and a further 5.7% in 2012, according to Arifumi Yoshida, director at Citi Investment Research & Analysis in Tokyo.

“The global tire market has never been so tight,” said Citigroup’s Yoshida. “Tiremakers can’t respond quickly enough to demand because they suspended expansion plans (during the recession).”

Rubber Prices and Production
Even after the slump in rubber futures since mid-February, prices are still 15% higher than a year ago and about double the average of $2.135 over the past decade. The cost of synthetic rubber surged 76% in the past year and reached $4,450 a ton on Aug. 3, the highest since at least 1997. A supply shortage will widen this year because of shutdowns and capacity constraints.

Global demand for natural rubber will rise 5.3% to 11.58 million metric tons in 2012, the third consecutive annual increase, Citigroup estimates. Production will expand 5.4% to 11.59 million tons, too little to prevent a decline in stockpiles relative to consumption, the bank predicts.

Production in Thailand and Indonesia, which represent 60% of global supply, is below normal, as rainfall is disrupting tapping in Thailand and trees are shedding their leaves in Indonesia, Bloomberg reported.
Rubber stockpiles monitored by the Shanghai Futures Exchange stand at 33,766 tons, compared with a five-year average of 63,213 tons, data compiled by Bloomberg shows, helping to shore up prices and compensating farmers for lost output.

Tuesday, August 30, 2011

OTR Tire Market Update

It’s back to business and we have some interesting data for you this month.  Almost all of the major sizes 49” - 63” have experienced a small decline in average pricing.  Although a very small relief, we do not foresee this being cause for celebration.  Examining the peak prices during the previous shortage and comparing them to the recent growth patterns from May 2010 to present, there is still a lot of potential for largely inflated tire prices (especially when comparing truck shipment data from the two periods).  Just over the last year, the price for a 40.00R57 has increased 362% (May 2010 – May 2011).  

Natural Rubber remains one of the primary driving forces behind continuing price increases from manufacturers.  The market has experienced 77 individual price increases from 18 tire makers this year.  More concerning is the rapidly decreasing global inventory of Natural Rubber which will certainly lead to further price increases and shortage of the raw material to produce finished goods.  

Truck shipments are also casting an ominous cloud over OTR availability and pricing.  Start-ups and expansions will drive the demand for tires through the roof as we enter 2012, potentially throwing the spot market into a state of relative chaos.  Based on estimates of growth in key mineral sectors and geographic regions, we may see a global population of nearly 38,000 trucks (90 mt+) come 2015 – where in 2010 we found ourselves at approximately 27,500.  This projection represents a 12% increase against peak 2008 shipments when tire prices were at their highest points *(Parker Bay Mining report).  

We foresee the end of 2011 and the beginning of 2012 to be an extremely critical time.  As trucks begin to ship to large start-ups and expansions, the demand for tires will grow exponentially in the market... This of course means that less tires will be available to a growing population of trucks, ultimately driving prices further.  The mines that remain proactive in procuring tires, trialing new brands, and finding trusted suppliers, will remain rolling at the lowest average cost... The others may find an up-hill battle to keep units in operation at the dear expense of profits.    

Wednesday, July 20, 2011

Around The Tire Shop - February 2011

Welcome to the first monthly installment of “Around the Tire Shop”, a newsletter that encompasses everything OTR.

“The way to make money in a gold rush is to sell picks and shovels”

Needless to say the goal remains the same with today’s high commodity prices fueling growth and massive expansion. However, our techniques have become for lack of a better word, gigantic. Our picks and shovels have transformed into 400-Ton Haul Trucks and 2,300-horse power Front-End Loaders that operate in mines around the clock. Not to mention these monsters wield some of the world’s largest rubber made tires.

In 2003, the $6.1B Earthmover Tire Industry experienced a classic case of Supply and Demand imbalance that was abruptly halted by the Global Recession. Scholars couldn’t have written a more clear-cut case study to illustrate how the two powers affect each other in the course of operation.

Globally, we found ourselves in one of the most significant “Mining Booms” seen to date. China had emerged into a ‘Giant of Consumption’ striving to raise living standards and industrialize. Consuming 1/2 of the world’s Cement, 1/3 of the world’s Steel, and a 1/4 of the world’s Copper, it served as the primary driver behind record commodity prices and maximized mining production.

Prior to the Recession’s emergence, industry experts predicted the tire shortage to reach 2,000 tires per month through 2011 where the level may have decreased to 1,000 tires per month due to manufacturer expansions (for popular sizes: 49”– 63” tires). As Demand grew so did prices for surplus inventory known also as “spot”, “open”, or “grey” market tires.

Needless to say the Global Recession hit and it struck the mining industry especially hard. China halted many of its projects and expansions, which in turn reduced their voracious consumption of raw materials. Many mines scaled back operations due to overstocking issues and this void gifted the tire manufacturers with the time that they needed to play catch up.

In the name of mining cycles, the industry now finds itself in an interesting place. Negative signs of the Recession have tapered off; China is back to buying raw materials, mines are picking up where they left off with expansion projects, and tire manufacturers are already beginning to use the dreaded word; “shortage”. Aside from the already mentioned, we must introduce one looming perplexity, the Natural Rubber shortage, which is already affecting both pricing and availability of tires of all sizes worldwide.

Taking into consideration the information provided hereinafter, miners must begin to evaluate what hurdles come with high commodity prices, and coincidentally the largest of them all will be OTR Tires.

In next month’s installment we get down to specifics to evaluate the opportunities and options that mine’s have amidst the looming shortage, and more importantly, what they can do to stay rolling. We also take a look at the key driving forces in the OTR shortage and how each affects the outlook of this fast moving market.

Mining truck tires more expensive than Porsches, Miami condos

China’s insatiable demand for commodities has prompted a tripling in the price of mining truck tires, making them more expensive than a Porsche 911 Carrera S type or a condominium in Miami.

Prices for tires about 3.5 meters (11 feet) across, used on the Caterpillar Inc. trucks that haul iron ore and coal, have touched $100,000 on the spot market, according to Leighton Holdings Ltd., a contractor for mining companies including BHP Billiton Ltd. and Anglo American Ltd. Prices rose as high as $150,000 in 2008.

That compares with contract prices of about $30,000, according to Roesler Tyre Innovators GmbH, which retreads so- called off-the-road tires. Demand from China, the world’s biggest metals buyer, drove copper, iron ore, gold and coal to records this year, forcing companies to compete for the equipment and labor needed to mine them.

“We fear the situation will become as tight as in 2007,” Paul Roesler, managing partner of Dortmund-based Tyre Innovators, said by phone from the company’s Perth office, citing Michelin & Cie and Bridgestone Corp. as major suppliers. “We see tight tire supply and high prices become a challenge for mining companies again but we think that the large players have prepared for this and have better contracts with suppliers and have improved stock.”

‘Just Exploding’

Demand for mining tires is “just exploding,” according to Titan International Inc. Manufacturers are reporting full order books for off-the-road tires for the next 18 months and alerting customers to the risk of shortages this year, according to Global Markets Perspectives Ltd.

“Where we need to expand rapidly or where we have a new project, then we have to source tires on the spot market like everyone else,” said Christian Sealey, a spokesman at Sydney- based Leighton, Australia’s biggest builder, in a telephone interview. “In those situations we’re finding some inflation.”

The last time tire prices surged was during the mining boom before the global financial crisis. Barrick Gold Corp., the world’s largest gold producer, said in January 2008 that it paid as much as $60,000 a tire for its largest vehicles, while some sold for as much as $300,000 in Internet auctions. The tire drought left companies such as De Beers, the world’s biggest diamond producer, unable at times to use new trucks.

The Porsche 911, including tires, costs $91,450, the carmaker says on its U.S. web site, while the median price in the first quarter of a previously owned condo in Miami-Fort Lauderdale was $79,200, according to the National Association of Realtors.

Market Tightening

“There seems to be a tightening of the market,” Lyndon Fagan, an analyst at Royal Bank of Scotland Group Plc, said by phone Sydney. “There are comments there’ll be a wait for tires.”

In Australia, the world’s biggest exporter of iron ore, coal and alumina, there are a record A$174 billion ($183 billion) of minerals and energy projects at an advanced stage of development, according to government forecasts last month. Rio Tinto Group, the No. 2 exporter of iron ore, is planning a $14.8 billion expansion to double output in Western Australia’s Pilbara region to 333 million metric tons by 2015.

Rio is prepared, said Gervase Greene, a Perth-based spokesman for the company. “We have appropriate arrangements with long-term suppliers to ensure that these price movements don’t affect us.”

The price of tires used in Australia by Newmont Mining Ltd., partner in the nation’s biggest open-cut gold mine, increased 4 percent this year, though this was offset by a stronger local currency, said Brian Watt, a company spokesman.

“Smaller players and mining contractors will find it difficult to meet their demand because they don’t tend to have longstanding supply contracts,” said Tyre Innovators’ Roesler.

© Copyright (c) The Vancouver Sun

Read more: http://www.vancouversun.com/cars/Mining+truck+tires+more+expensive+than+Porsches+Miami+condos/5030611/story.html#ixzz1SeBPgRXB

Saturday, December 18, 2010

Global boom in commodities capex

By Javier Blas in London

Published: December 14 2010 19:29 | Last updated: December 14 2010 19:29

Global spending on mining will surpass pre-crisis levels next year, according to an emerging industry consensus, highlighting rising confidence in an economic recovery led by China and other fast-growing markets.

The boom in capital expenditures, which extends to the oil, natural gas and agribusinesses, comes amid sharply rising prices for commodities such as copper, iron ore, crude oil, sugar and wheat.

The investment surge also raises the likelihood of short-term bottlenecks in the already stretched supply of equipment and services, and project delays as costs rise.

Global mining expenditure is set to hit a record $115bn-$120bn next year, above the peak of $110bn set in 2008, according to a survey of senior industry executives and consultants.

The rise is being driven by miners such as Vale of Brazil, Rio Tinto and Xstrata, who want to take advantage of generational boom in demand and pricing for raw materials.

In Australia, the hottest mining region, the government’s resources forecasting agency predicts expenditure to jump by 58 per cent year-on-year.

Separately, in energy, consultant Wood Mackenzie estimates the world’s largest oil and gas companies will spend nearly $100bn on development projects next year, up 12 per cent from 2010.

Chevron, the US second biggest oil company, announced last week its biggest ever capital expenditure, budgeting $26bn for next year, up 20 per cent from 2010.

Tom Albanese, chief executive of Rio Tinto, said the mining industry is moving into what he describes as a “growth response” to booming demand and higher prices. “There is a greater sense of optimism in the sector”

“We are entering the earlier stages of another multiyear expansion of the industry,” said Mike Sutherlin, chief executive of Joy Global, one of the largest manufacturers of mining equipment, such as excavators.

Agribusiness companies are also boosting investment, executives said. John Deere, the world’s largest manufacturer of tractors, announced this month new spending for 2011 to underwrite a record number of new models.

As natural resources companies lift investment, senior executives fear that wages and cost inflation and longer lead times will limit the supply response to booming demand and drive commodities prices higher.

“It is not yet of 2007-08 proportions, but cost inflation and lead times are again rearing their head,” said Colin Hamilton, commodities analyst at Macquarie. Runaway cost inflation and labour and equipment shortages ravaged the commodities industry in 2007-08, pushing up raw materials prices as companies missed deadlines for new projects. The problem gained notoriety when miners were forced to cut back operations after running out of tyres for their gigantic trucks.

The surge in investment after a hiatus in 2009 and 2010 in the wake of the financial crisis will trigger a bonanza for the sector’s services companies. But it could eat into producers’ profits.

As a result, executives said the cost of developing and running oilfields, mines and farms had regained its upward momentum and forecast further rises in 2011-2015. Cost inflation measures are sketchy, but consultants IHS-Cera said energy upstream costs rose last quarter for the first time since mid 2008.

Executives said the biggest cost pressures were hitting Australia, the Brazil-Chile-Peru region, the coal market in China and areas of Canada and Africa.

“The fact that overall upstream costs are trending upwards points to the increase in oil and gas activities worldwide,” said Daniel Yergin, chairman of IHS-Cera.

Alex Krueger, managing director at First Reserve Corp, the $20bn natural resources private equity investor, said increased activity in commodities was “expected to result in longer lead times for key items such as tyres and escalating costs of explosives and wages.”

Thus, natural resources executives said they were paying extra attention to procurement. John Beevers, chief executive of Orica Mining Services, one of the top suppliers of explosives to the mining industry, said that “security of supply” was replacing price as a top concern for his customers.
Additional reporting by Sylvia Pfeifer in London

Copyright The Financial Times Limited 2011. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Friday, April 23, 2010

KTB Products for OTR Tires

HSM TIRE Co. is proud to announce that it has teamed up with KTB Products to market and distribute its full line of products including the their KTB Rust Eliminator and Lube product. This product has been successfully used in the market place for the past 40 years and is the only product of its kind that is approved for use by the EPA’s “Design for the Environment” program.

In its simplest form the product is a non-fibrous liquid that is added to the air chamber and acts as a “Rust Eliminator and Lube”, that when used, impacts tire and rim maintenance on several different levels.
KTB’s primary focus is to act as a rust inhibitor that prevents rust from building up on any part of the rim by forming a protective coating for the steel. KTB can also be used on rims with rust build-up and over time will clean the existing rust formation by simply washing it away during operation. With the use of the Rust Eliminator and Lube end-users can eliminate the added cost and downtime of constant rim clean up and re-painting as well as having to replace a rim in its entirety.

Very popularly used as a preventative maintenance method, KTB RE&L is well known for reducing tire failures through improved air retention by acting as a sealant for vent/rim leaks, pinholes, and liner cracking. This quick sealing action combats against under inflation and allows for the units to remain in operation avoiding unnecessary downtime.

KTB also plays a very important role in maintaining a consistent running temperature in your OTR tires. The fluid is formulated in a way that it holds an absorbent heat function and acts as an agent for heat transfer to cooler areas of the tire.

In addition to the abovementioned functions, KTB RE&L also allows for an increased “ease of use” around the tire yard. When using the product it also acts as an excellent lubricant that makes mounting and dismounting tires a far faster and safer process, which in turn reduces the downtime and labor costs significantly. While mounting tires, KTB RE&L helps the O-Ring sit and seal properly avoiding any air leakage and potential loss of air pressure in operation.

As safety remains one of the highest priorities to Mining companies they can be assured that KTB Rust Eliminator and Lube will help increase operational safety for your tire handlers and OTR maintenance crew while performing maintenance procedures on both tires and rims.

KTB Rust Eliminator and Lube can be customized to fit every operating condition out there. It is important to have an understanding of how a product like this reacts in certain conditions. KTB Rust Eliminator and Lube is offered in:

Ultra High Performance Blend – For use in extreme heat or extreme cold to combat freezing or evaporation/boiling
High Performance Blend – For use in above average heat or cold
Standard Blend – For use where ambient temperatures remain consistently mild (if either heat or cold are not an issue in operation


  • Tires run cooler to extend tread life by reducing heat build-up
  • Increases casing life – providing increased re-treadability and longer lasting re-treads
  • Maintains air pressure – keeps bead area pliable and helps stop dry rot
  • Eliminates rust on rims
  • Helps detect valve and tire damage and rim cracks
  • Lubricates for perfect seat when remounting tires and quick tire removal
  • Tire changer friendly – repairing tire made easier
  • Recap shop friendly – cleans out in seconds with a wet vac
  • Will NOT block valve stem
  • Does NOT freeze
  • Protects very expensive tire/equipment investments

There is an array of products that are similar to KTB Rust Eliminator and Lube available to the larger mining industry. It must be strongly noted that KTB Rust Eliminator and Lube is the ONLY product within its peer group that possesses the approval of the United States Environmental Protection Agency as well as the ”Designed for the Environment” label which indicates the product is actually safe for the environment (see environmental section).

While many MSDS reports may look similiar when put in comparison, it is the environmental certification of KTB’s product that puts it above the competition. There are reasons why KTB is the only of its kind to be approved, and many of those reasons stem from competitors not exercising full environmental stewardship (see environmental section for technical explanation).

Gaining the EPA approval has forced KTB Products Corporation to sacrifice certain financial gains (investment into specific classes of raw materials),but, KTB has made the investment to ensure its product will NOT contaminate land, water, wildlife, surrounding environment, or humans coming into contact with it.

To learn more go to www.hsmtire.com