Anything that can haul a 200- or 300-tonne load needs a set of huge wheels clad in huge tires. One of the very biggest haulers, the Caterpillar 797 used in Alberta’s oilsands, wears 13-foot-tall radial tires that weigh about five tonnes each. The enormous tires are needed to support the 797’s two-storey, 260-tonne frame and payloads in excess of 350 tonnes.
Of course, size isn’t everything. Wear resistance and traction are two of the other factors that separate the good from the bad, or the exceptional from the merely mediocre. Canadian mining companies need to know the tires will endure the rugged terrain, long workdays and often inhospitable weather of their sites.
The world’s major tire makers have happily supplied those needs with products priced at thousands, often tens of thousands, of dollars apiece. Then, sometime in the middle years of this millennium’s first decade, the supply chain hit a snag.
Demand from emerging economies, especially China, fueled a sharp scarcity in off-the-road (OTR) tires. Many projects in resource extraction stalled as companies scrambled to find tires for their big machines.
Tire manufacturers tried their best to meet those needs but found it difficult to do so as a “perfect storm” of simultaneous North American and overseas demand rocked the rubber products sector.
Mid-Canada Forestry & Mining reported on the problem in its Summer 2006 edition and now presents an update.
Situation better
“The situation has indeed improved,” says Mike Dembe, Sales Manager at Toronto-based Solideal Canada, a tire manufacturer and seller. “We have come off an approximately three-year OTR tire shortage.”
The global shortage, which eased up noticeably by 2008, sparked bidding wars on OTR tires and a “grey market” of fringe dealers selling questionable fare at inflated prices. As well, retreading grew in popularity and entrepreneurial types scrounged up old tires for sale to retreading shops.
The shortage “caught everyone off guard,” a Yokohama Tires executive told GX Contractor magazine in 2005. “We’re behind in production about 10 months, with heavy back orders. In 40 years in the tire business, I’ve never seen anything like this.”
Mining behemoth Rio Tinto responded by establishing its own retreading shop, capable of giving new life to 1,000 old OTR tires annually, in Perth, Australia.
Though it helped some companies fill their OTR needs, retreading was never the solution. For one thing, there just aren’t many facilities capable of retreading tires that stand taller than an NBA forward. And, like Rome, such a retreading shop couldn’t be built in a day.
Similarly, OTR tire manufacturing couldn’t be ramped up right away. Rectifying the shortage would take time and large investments.
The Chinese were able to partially fill their own OTR tire needs with made-in-China products, and exported some of those tires to North America.
Unfortunately, some Chinese products were not so good. “Quality was mixed,” Dembe remarks. “In general, it was of a lesser quality than major brands.”
He adds that Solideal did, however, find a quality line of Chinese products to meet OTR needs. The Duratough brand includes 24.00R35 tires that are about seven feet tall by three feet wide, and suitable for a Caterpillar 773 rigid haul truck.
Besides China ramping up its OTR tire production, other factors behind improvement in the OTR market include a slowing of demand and the way big tire companies increased their own OTR production capacity.
Michelin, the world’s largest tire maker, invested $85 million US to expand its Earthmover plant in South Carolina to meet demand for the brand’s 57- to 63-inch radial tires. It also dedicated a $200-million OTR tire plant in Brazil.
Yokohama Tire expanded facilities in Japan and struck a deal with Barrick Gold Corporation to create a dedicated tire plant (in Hiroshima) for production of more than 1,000 units a year for the mining giant. Bridgestone Firestone opened a new factory for large and ultra-large OTR tires last year in Japan. Goodyear expanded its retreading shop in North Bay, Ontario. Titan Tire expanded production of giant (63-inch) tires at an Ohio facility.
And, while production capacity was being increased, demand started to decline due to several factors. A recession and credit crunch hit the U.S. home-building market hard, and that in turn reduced demand for copper and other metals. The mining industry scaled back instead of growing, and didn’t need tires so much as big machines went idle.
OTR tire manufacturers no longer have to worry a whole lot about producing enough to meet the needs of their customers. “The pressure’s off,” as John Mullin, a Vice-President of dealer chain Kal Tire, puts it.
No letting up
Indeed, Jonathon Karelse has statistical evidence that the “pressure” of demand for OTR tires has dropped to uncomfortable lows. Karelse is both National Marketing Manager for Yokohama Tire (Canada) and Chair of the Rubber Association of Canada’s statistics committee.
After peaking in 2004 at 55,000 units shipped, industry-wide Canadian OTR tire sales slid to 38,000 in 2007, 35,000 in 2008 and a paltry 33,000 last year. By contrast, Karelse points out, annual sales always exceeded 40,000 units in the years prior to 2007. He says 2009’s sales volume is the lowest on record.
Whether last year’s number represents a bottoming-out in the OTR market remains to be seen, but it is clear that tire makers aren’t letting up or giving up on their aspirations of bigger shares of the OTR market.
Goodyear, for instance, has announced a multimillion-dollar investment in an existing Kansas plant to make 63-inch radials for open-pit mining haul trucks. A Goodyear executive described the plant upgrade as “a long-term strategic decision that reflects Goodyear’s commitment to deliver products for OTR customers’ changing demands.”
Moreover, engineers and scientists at all the major tire manufacturers are devising and experimenting in ways to make even better, longer-lasting products. The puzzles they’re trying to solve include how to improve cut resistance, wear resistance, traction and heat management. (The temperatures haul trucks’ tires reach constitute perhaps the most important factor behind tires’ durability, or lack of it.)
Building better and better tires is “tremendously important” to Titan, says Paul Hawkins, the Illinois-headquartered company’s Vice-President of OTR sales. “Research and development is a critical element in the overall stability of Titan’s long-term strategic plan.
“Our R&D group has redesigned a new generation of giant mining tires based on the lessons learned from our first generation,” he continues. “We tested over $2 million worth of tires to prove these designs. The results are impressive. This new-generation giant mining tire is able to run 35 to 40°F lower in temperature, and is also 1,500 pounds lighter. These design features, along with new rubber compounds, have resulted in better performance at faster speeds.”
You might say the wheels are always turning at Titan.
