GILLETTE - Got radials?
Wyoming's coal mines and construction industries are scrambling to find industrial-sized tires in a tightening worldwide tire market.
Under strain from U.S. military demands in Iraq and Afghanistan and development in China, India and other nations, tire manufacturers can't keep up with orders to supply a growing fleet of big trucks and earth-moving equipment.
"I've got over 200 tires on back-order right now," said Gerald Watts of Wingfoot LLC in Gillette.
Several coal companies say they have stockpiled enough tires to get through the busy summer production season when mines are their busiest. The demand for tire re-treading and repairs is at its highest ever, according to local tire distributors.
Industry officials say tire manufacturing is near capacity, and world demand has simply outpaced the ability to fill orders quickly. Some local tire distributors say that if Wyoming's tire-reliant industries can't get the rubber they need, it could put some energy production, construction and even over-the-road commerce up on blocks.
"We're to that point where new equipment is being shipped from manufactures with used or re-treaded tires. Sometimes equipment is being shipped bare-footed, then they have to find used or re-treaded tires," said Anthony Martinez of Tire Professionals in Casper.
The crunch has pushed prices upward by more than 13 percent in the past year, according to Martinez. Tires are believed to be the mining industry's second-largest expense, behind only employee wages. Diesel is third.
The cost of a single tire for a haul truck in the Powder River Basin can range from $20,000 to $30,000. Tires for other equipment, such as large loaders, can range up to $40,000 for a single new tire, Watts said.
That's a big expense for an industry that includes 16 active coal mines and the largest rubber-tire haul truck fleet in North America. Mines typically run radial tires on haul trucks because bias-ply tires run hotter and don't last as long. If a mine were to run bias-ply tires on a haul truck, it would likely have to haul less tonnage and at slower speeds.
Many in the industry saw the tire crunch coming.
"Through proper planning, implementation and collaboration with our major suppliers, sufficient tires have been secured to meet our needs," said Dallas J. Scholes, manager of communications and government affairs for Kennecott Energy. "We are also making ongoing efforts to increase the life of our tires through operational improvements."
Arch Coal spokesman Greg Schaefer said his company stockpiled tires, too. Its Wyoming mines are also trying to create a more tire-friendly environment. The mines are carefully grooming haul roads and avoiding steep grades whenever possible.
Goodyear Tire & Rubber Co. spokesman Jim Davis said the tire crunch is affecting all areas, including smaller tires for passenger vehicles. However, manufacturers are better prepared to meet the demands of that segment than for the big-tire customers.
"Those aren't exactly the kind of tires where you can step up production right away," Davis told the Star-Tribune.
Another reason for the tight tire market is a global strain on raw materials, such as steel. A lot of steel goes into a radial tire, especially one that can ring two Volkswagen Bugs.
Davis said oil is a major component of tires, and soaring oil prices hurt the tire industry as well.
"There are huge construction projects going on all over the world. Global demand is on an upswing," Davis said.
Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dzeffer@trib.com.
Posted in State-and-regional on Saturday, April 30, 2005 12:00 am
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