Shandong Aims to Raise Tire Capacity Utilization to 80%

Shandong province has completed the implementation guidance on further promotion of supply side structural reform and will officially release and enforce the regulation in the near future, said Wang Zhonglin, head of the Provincial Development and Reform Commission of Shandong.

The reform plan has involved nine key industries, including iron and steel, coal, tire, and chemical industries. Shandong aims to raise the capacity utilization of those industries to over 80%.

An industry insider said that the capacity utilization of Shandong’s rubber and tire industry was merely 64.5%. Inadequate market demand and weak brand influence left Shandong’s tire producers only one way to compete: price war.

Therefore, the priority of rubber and tire industry in Shandong was considered to be de-capacity by the provincial authorities.

Since the beginning of 2016, the average feed-in tariff of electricity plants in Shandong lowered 4.65 cents per kWh. The costs of companies in Shandong on electricity are expected to less 9.55 billion yuan this year.