In 2026, the domestic tire industry is experiencing a continued wave of price increases.
In just two weeks, another round of price adjustments covering all categories was ushered in.
On April 15, a reporter from China Finance News learned from the industry chain that a number of tire companies, including Zhongce Rubber (603049.SH) and Sailun Tire (601058.SH), etc., simultaneously issued price adjustment notices.
In response to the pressure on raw material costs, these companies have decided to raise prices for many types of their products, with the price increases generally ranging from 3% to 5%.
Specifically, based on the price increase letter on April 1st, Zhongce Rubber increased the price of some models of all-steel tires by 1% – 3%, and butyl inner tubes and pads by 2% – 5%. A supplementary price adjustment will be implemented from April 16th; Sailun Group will increase the price of TBR products by 3% – 5% from May 1st; Wanli Tire plans to increase the price of all TBR domestic brands by 3% – from May 10th.
4%.
Relevant industry insiders pointed out that the price of butadiene is soaring and the price of synthetic rubber continues to be high. The combination of multiple factors has caused tire companies to bear huge cost pressure.
Moreover, this round of price increases by tire companies is still difficult to fully cover the increase in costs.
Only when this round of cost disruption subsides can the profitability of tire companies be truly restored.
In fact, since March, many tire companies have begun to issue price increase letters one after another.
All-steel tires, semi-steel tires and other products from Zhongce Rubber, Linglong Tire (601966.SH), Sailun Tire and other companies generally increase prices by 2% – 5%, with some product specifications increasing by nearly 10%.
Zhongce Rubber even sent three letters in a row on March 31. From April 1, passenger tires, bias tires and off-highway tires will increase by 3% – 5%, all-steel TBR products will increase by 2% – 3%, and inner tubes will increase by up to 8%. It also clearly stated that there will be another price increase on April 16.
From the wording of the price increase letter, it can be clearly seen that the cost of raw materials has brought tremendous pressure to the company.
Zhongce Rubber stated in its price increase letter that due to the complex changes in the global market, the prices of major raw materials for tire production have continued to rise rapidly recently, resulting in a sharp increase in tire production costs.
The magnitude of this adjustment is far lower than the increase in costs, and raw materials have been in short supply.
Wanli Tire also stated that since April, tire raw material prices have continued to run at high levels, and tire production costs have far exceeded expectations.
Data show that in the first quarter of this year, the spot price of butadiene exceeded 18,000 yuan/ton, with a cumulative increase of more than 118%, setting a new high since 2017; butadiene rubber prices rose from 11,960 yuan/ton in early January to 18,140 yuan/ton in early April; even carbon black, whose price is relatively stable, has increased by more than 13% in a single month.
Longzhong Information data shows that as of April 2, the gross profit of 205/55R16 products of a mid-range brand of semi-steel tires was -1.11 yuan/kg, a month-on-month decrease of 0.76 yuan/kg, and the degree of loss was further magnified compared to the previous period.
A tire company official said frankly, “A price increase is definitely better than no increase, but the current price increase of 3% – 5% is indeed difficult to cover the cost increase, and many companies are struggling to cope with the pressure of losses.” This round of price increases is essentially a passive adjustment caused by industry cost restructuring, rather than the company’s active pursuit of profitability.
If raw material prices continue to run at high levels, there is a high possibility of a new round of more substantial price adjustments in the industry.
Wanli Tire also made it clear in today’s price increase letter that it does not rule out the possibility of further price adjustments in the future based on changes in raw material prices and market environment.
As for when tire companies will see real profit recovery, industry insiders said that from the perspective of industry operation rules, the core lies in the time mismatch between raw material price fluctuations and the transmission of price adjustments by tire companies, that is, tire companies’ price adjustments usually lag behind the fluctuations in raw material prices.
“Therefore, when raw material prices rise rapidly, corporate profit margins are significantly compressed; similarly when raw material costs fall, tire companies’ gross profit margins will gradually rise. At this stage, tire companies are more urgent in their pursuit of profits.” The person further said.
