Since March, the domestic tire industry has ushered in an intensive price increase.
500 companies, including Zhongce Rubber, Sailun Tire, and Linglong Tire, have successively issued price increase letters. All products such as all-steel tires and semi-steel tires have generally increased prices by 2% to 5%, and some product specifications have increased by nearly 10%.
This round of price increases is not an initiative taken by companies, but a response measure taken by companies to alleviate cost pressures against the backdrop of price increases across the board for core raw materials such as rubber and carbon black.
From a cost perspective, the three core raw materials of natural rubber, synthetic rubber, and carbon black account for more than 70% of tire production costs.
Recently, the prices of these three products have risen simultaneously. Coupled with the rising costs of auxiliary materials and logistics, the comprehensive cost pressure of tire companies has reached a stage high.
As the core raw material for tire production, natural rubber accounts for about 30% of the production cost of all-steel tires. Its price fluctuations directly affect the profitability of tire companies.
Currently, the main natural rubber producing areas in Southeast Asia have entered the traditional cut-off period, with production declining seasonally from March to April, and shrinking supply directly driving up spot prices.
As of March 20, the price center of domestic rubber futures has moved up significantly compared with the beginning of the year.
At the same time, the exchange rate of the US dollar against the RMB remained at around 6.9. The geopolitical conflict in the Middle East caused fluctuations in international logistics costs. The CIF price of natural rubber imports increased by 8% year-on-year, further increasing the procurement costs of domestic enterprises.
Synthetic rubber (styrene-butadiene, cis-butadiene) accounts for 25% – 30% of the tire cost, and its price is deeply tied to international oil prices.
Recently, international oil prices have remained high and volatile, with Brent crude oil prices exceeding US$113/barrel, driving the cost of oil-based raw materials to continue to rise.
At the same time, the supply of butadiene, the core raw material of synthetic rubber, is tight. There are no new production plans in China in the first half of the year. Hainan Refining and Chemical, Maoming Petrochemical and other units are scheduled to start maintenance in March, and cracking units in Japan and South Korea are shut down for cleaning. This further aggravates the supply gap, pushing butadiene prices up by 12%, and cost pressure is simultaneously transmitted to the tire production link.
As an important filler in tire production, carbon black accounts for about 15% of the cost. This round of price increases is the fastest and most significant.
On March 15, the international carbon black giant Cabot China issued a price increase letter for the second time this year, raising the sales price of all special carbon blacks by 1,800 yuan/ton. Domestic small and medium-sized carbon black companies have followed up with price increases.
The core of the price increase is due to the rigid increase in raw materials: coal tar accounts for 70% – 80% of the cost of carbon black production, and the price in main production areas has increased by 550 – 660 yuan/ton; at the same time, the tightening of environmental protection policies has forced some small and medium-sized carbon black companies to shut down and limit production, and the industry’s production capacity has shrunk by 15%. The supply gap has further amplified the price increase effect.
According to industry monitoring, carbon black prices have skyrocketed by 13% in a single month since 2026, and the mainstream quotation of the N660 model has increased by 2,000 yuan/ton from the beginning of the year, an increase of 12.5%, becoming an important driver of tire companies raising prices.
In addition to the three core raw materials, the prices of auxiliary materials such as steel cords and chemical additives have increased simultaneously, with some auxiliary materials increasing by more than 20%; geopolitical conflicts in the Middle East have pushed up international logistics costs, and tire companies’ logistics costs have increased by 15% – 20% year-on-year.
Under the superposition of multiple costs, the comprehensive cost of all-steel tires has increased by 6% – 8% compared with the beginning of the year, and the cost of semi-steel tires has increased by 4% – 6%. It is difficult for companies to tap their internal potential to absorb the cost pressure, and price increases have become industry consensus.
The current round of price increases in the tire industry has shown a pattern of “leading the price increase, followed by the entire industry”, covering all categories such as all-steel tires, semi-steel tires, and off-highway tires. The pace of price increases is clear, and the transmission and implementation situation is generally good.
Judging from the price increase timeline, from early March to mid-March, companies such as Zhongce Rubber, Goodyear, and Magxis took the lead in launching price adjustments; from mid-March to the end of March, leading companies such as Sailun Tire, Linglong Tire, and Guizhou Tire followed suit; from the end of March to early April, companies such as Fengshen Tire, Doublestar Tire, and Zhengxin Tire intensively announced price increases.
As of March 22, the industry has issued more than 80 price increase letters, involving most domestic tire companies. The price increases are concentrated between 2% and 5%. Leading companies mostly implement the upper limit, and all of them specify in the price increase letters that “core raw material costs continue to rise” as the basis for price increases.
In terms of the terminal market, demand for passenger tires remains stable, while commercial tires benefit from the recovery of the logistics industry and have strong demand resilience, which provides support for companies to raise prices.
However, the price increases of small and medium-sized tire companies are slightly slower than that of leading companies. This is mainly affected by the channel inventory digestion cycle. Some small and medium-sized enterprises are still digesting early low-priced inventory, and the pace of price adjustments is relatively lagging behind.
Relevant research reports from securities firms pointed out that the current performance recovery of the tire industry still faces multiple uncertainties.
First, raw material prices rise more than expected. If international oil prices continue to rise, or natural rubber production in Southeast Asia is reduced more than expected, it may cause tire costs to rise further and compress corporate profit margins; second, terminal demand recovery is less than expected. If domestic passenger car sales and commercial vehicle logistics demand recover slowly, it may lead to a backlog of tire inventories, affecting the effect of corporate price increases; third, fluctuations in international trade policies, the final ruling on anti-dumping in Europe, and adverse changes in U.S. tariff policies may affect overseas orders of leading companies, thereby dragging down performance.
In the short term, raw material price fluctuations may bring periodic pressure; in the long term, the industry competition landscape is optimized, and leading listed companies are expected to achieve sustained growth in performance and usher in an inflection point for profit restoration.
