Cost Pressures Intensify, Tire Industry Faces Collective Price Adjustments

Since March, the domestic tire industry has experienced a wave of widespread price increases. Companies like Zhongce Rubber, Sailun Tire, and Linglong Tire, among 500 enterprises, have successively issued price increase notices. All product lines, including all-steel and semi-steel tires, have generally raised prices by 2%-5%, with some specifications approaching a 10% increase. According to analysis, this round of price hikes is not driven by proactive pricing strategies but is a response to the sharp rise in core raw materials such as rubber and carbon black.

Cost Pressure

According to Zhuochuang Information monitoring, natural rubber, synthetic rubber, and carbon black, the three main raw materials in tire production, account for over 70% of costs. Recently, their prices have risen simultaneously. Coupled with rising auxiliary materials and logistics costs, tire companies are facing a peak in overall cost pressure.

Natural rubber, which accounts for about 30% of the cost of all-steel tires, is a core raw material in tire manufacturing. Its price fluctuations directly impact the profitability of tire companies. Currently, the main natural rubber producing regions in Southeast Asia are entering the traditional tapping off-season, with seasonal production declines in March and April. This supply contraction has directly driven spot prices upward. As of March 20, the central price of rubber futures in China has significantly increased compared to the beginning of the year. Meanwhile, the USD to RMB exchange rate remains around 6.9, and geopolitical conflicts in the Middle East have caused fluctuations in international logistics costs. The import landed price of natural rubber has increased by 8% year-on-year, further raising domestic procurement costs.

Synthetic rubber (styrene-butadiene, cis-butadiene) accounts for 25%-30% of tire costs and is closely tied to international oil prices. Recently, international oil prices have remained high, with Brent crude surpassing $113 per barrel, driving up the costs of oil-based raw materials. At the same time, the supply of key raw material butadiene is tight; no new domestic production capacity is planned for the first half of the year. Several units at Hainan Refining and Mianyang Petrochemical started maintenance in March, and cracking units in Japan and South Korea have shut down, further tightening supply. As a result, butadiene prices have increased by 12%, passing cost pressures onto tire manufacturing.

Carbon black, an important filler in tire production, accounts for about 15% of costs. This round of price increases has been the fastest and most significant. On March 15, Cabot, a major international carbon black producer, issued its second price increase notice of the year, raising the price of all specialty carbon black sales by 1,800 yuan/ton. Domestic small and medium-sized carbon black companies have followed suit. The core reason for the price hike is rigid raw material cost increases: coal tar, which accounts for 70%-80% of carbon black production costs, has seen prices rise by 550-660 yuan/ton in major producing areas. Additionally, tightening environmental policies have forced some small and medium-sized carbon black producers to shut down or limit production, shrinking industry capacity by 15%, which further amplifies supply shortages and price increases. Industry monitoring shows that since 2026, carbon black prices have surged by 13% per month, with mainstream quotes for N660 grade rising by 2,000 yuan/ton from the beginning of the year, a 12.5% increase, making it a key driver for tire companies to raise prices.

Beyond these three core raw materials, prices for auxiliary materials such as steel cord and chemical additives are also rising in tandem, with some increasing by over 20%. Geopolitical conflicts in the Middle East have pushed up international logistics costs, with logistics expenses for tire companies increasing by 15%-20% year-on-year. Under the combined effect of multiple cost increases, the overall cost of all-steel tires has risen by 6%-8% since the beginning of the year, and semi-steel tires by 4%-6%. Internal cost-cutting efforts are no longer sufficient to absorb these pressures, making price increases a consensus across the industry.

Leading Companies Drive Price Increases

This round of tire industry price hikes features a “leading companies initiate, entire industry follows” pattern, covering all categories including all-steel, semi-steel, and off-road tires. The pace of price increases is clear, and the implementation is generally smooth.

Looking at the timeline, from early March to mid-March, companies like Zhongce Rubber, Goodyear, and Maxxis took the lead in adjusting prices. Zhongce Rubber raised prices for loader tires, and Goodyear announced a price increase for some truck and bus tires starting in April. From mid-March to the end of March, leading companies such as Sailun Tire, Linglong Tire, and Guizhou Tire followed suit. Sailun Tire announced a 3%-5% price increase for TBR products starting April 1, and Guizhou Tire explicitly stated it would uniformly raise prices across all product lines when appropriate. From late March to early April, companies like Fuzhou Tire, Double Star Tire, and Chaozhou Tire announced price hikes. Fuzhou Tire increased prices by 2%-5% across all products starting in April; Double Star’s all-steel tires increased by 3%-4%; and Chaozhou Tire raised all tire categories by 5% starting March 21.

As of March 22, over 80 price increase notices had been issued across the industry, involving most domestic tire companies. The price increase range was concentrated between 2% and 5%, with leading companies mostly implementing at the upper end of this range. All notices explicitly cited “continuous increases in core raw material costs” as the reason for the price hikes.

In terms of terminal markets, demand for passenger car tires remains stable. Commercial vehicle tires benefit from the recovery of the logistics industry, showing strong demand support for price increases. However, smaller tire companies are slower to implement price hikes compared to leading firms, mainly due to channel inventory digestion cycles. Some smaller companies are still working through previous low-price inventories, resulting in a relatively delayed adjustment pace.

Brokerage reports indicate that the industry’s performance recovery still faces multiple uncertainties: first, raw material prices could rise further than expected—if international oil prices stay high or if Southeast Asian natural rubber production declines more than anticipated, tire costs could increase further, squeezing profits; second, the recovery of terminal demand may fall short of expectations—if domestic passenger car sales and commercial vehicle logistics recover slowly, tire inventories could accumulate, affecting the effectiveness of price increases; third, fluctuations in international trade policies—if unfavorable rulings on anti-dumping in Europe or tariffs in the US occur, they could impact orders for leading companies overseas, dragging down performance. In the short term, raw material price volatility may bring temporary pressures; in the long term, industry competition is expected to optimize, and leading listed companies are likely to achieve sustained growth and reach a profit recovery turning point.