Industry Landscape Shifts: Small Makers Lose Money while Leaders Grab Global Share(Nov 13)

November 13, 2026

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Highlights at a glance

The tire industry faces its toughest year yet with surging raw material prices and sluggish demand putting pressure on profits. Leading manufacturers like Sailun, Linglong, and Zhongce Rubber have shown resilience, securing market share by leveraging long-term raw material orders, optimizing product offerings, and expanding global capacities. Despite a challenging Q3, some leaders kept gross margins above 10% and even reached over 20%. The prolonged impact of cost hikes and demand softness has pressured small and mid-sized players, triggering capacity exits. As raw material prices stabilize at high levels and leaders develop international bases, their competitive edge continues to grow, leaving smaller rivals struggling to stay afloat. This illustrates a clear industry shift where leaders consolidate, and smaller firms face a turbulent landscape.

Industry Landscape Shifts: Small Makers Lose Money while Leaders Grab Global Share

So far this year, a surge in core raw material prices combined with weak demand has pushed the tire industry into a "darkest hour." Against this backdrop, however, the operating resilience of leading producers has become more evident: their output and sales posted fairly good year-on-year growth and their market share continues to rise. In the first half of the year, some leaders delivered double-digit growth in half-year net profit; by Q3, core raw material prices kept climbing month on month and industry conditions worsened further. Some leaders' earnings slipped but still turned a decent profit, and one even kept a gross margin above 20%.

According to a person in charge at a Jiangsu tire company, leaders such as Sailun (601058.SH), Linglong (601966.SH) and Zhongce Rubber (603049.SH) can hedge and procure under long-term orders to lower raw-material costs, hold a high share of overseas capacity, and are stronger at optimizing product mix; small and mid-sized tire makers have weaker resistance, steeper profit declines, and more capacity may exit.

Price Hikes Land Concentrated in Q4

The core raw materials are natural rubber, synthetic rubber and carbon black, together accounting for more than 60% of tire production cost. Natural rubber is the largest single material, making up about 35%–42% of the cost of all-steel tires, and its swings directly determine the profit elasticity of tire makers. Public data show that as of October 9 the domestic natural rubber average price was CNY 19,700 per tonne, up 28.27% year to date and 31.45% year on year; by early November 2026, major synthetic rubber varieties were broadly up more than 40% year on year, near multi-year highs; in the first three quarters, the carbon black average price was CNY 8,039 per tonne, up CNY 899 per tonne, or about 12.6%, year on year. Tire production costs climbed through the first three quarters, with Q3 cost pressure reaching a phased high.

Against this backdrop, the tire industry has already gone through four rounds of concentrated price hikes this year. The fourth round was concentrated in September: industry data show more than 60 tire companies issued over 70 price letters covering all-steel, semi-steel and OTR tires, with hikes generally 2%–5% and some specifications up to 10%, effective dates running from October 5 through December 1. Zhongce Rubber raised all-steel prices 2%–5% on September 16 and another 3%–5% on October 1; Sailun announced TBR prices up 5%–7% from November 1; Haian Group raised mining tires 7%–10% from December 1, the largest single hike in this round; Triangle Tire (601163.SH) raised passenger tire prices 2%–5% from October 1.

Price transmission lags channel inventory and order-delivery cycles. Most letters take effect on October 1, in mid-to-late October, or on December 1, so Q4 will be the concentrated landing period. Given strong bargaining power of downstream automakers and soft terminal demand, pass-through to the end market is diluted layer by layer, and how much of the hike actually lands remains uncertain. The earlier hikes are now landing gradually; a listed-company board secretary estimated that the company's Q4 price hikes would realize around 3 percentage points. Industry participants expect another one to two rounds of hikes before the Spring Festival, and cost pressure may not reach the terminal until 2027. The pullback in China NEV subsidies has directly dragged on tire OEM orders; commercial vehicles slowed on the high September base, National Day production cuts and weaker new orders, while European and North American OEM sales also shrank year on year in the first half.

Leaders Keep Raising Market Share

Under the dual squeeze of falling demand and soaring costs, most tire makers lose money on every unit sold, yet some leaders' output and sales still rise, meaning their market share keeps climbing. In Q3, leaders including Zhongce, Sailun and Sentury saw earnings slip but remained fairly profitable, with gross margins above 10%, and Sailun's even exceeded 20%. A Jiangsu tire executive said leaders rely on advantages in product mix, overseas layout, long-term raw-price locks and futures hedging to keep composite costs below the industry average and resist risk more strongly. Industry expansion has become more cautious this year, and much small capacity is being cleared passively, which helps leaders hold market share.

On raw-material cost control, leaders both lock prices through long-term orders and cut high-price purchases and inventory, keeping only rigid-demand production. "When materials were falling, our inventory cycle was about two months; now that prices have risen this much, the company keeps inventory at around one month," said a Triangle Tire executive. On product mix, leaders have clearly upgraded toward larger sizes, high performance, NEV fitments and higher value-added products; the share of premium products and capacity layout keep improving. "Overseas bases are selective on orders, choosing relatively high-margin quality orders and rejecting low-price ones," said a Sailun executive.

Public information shows Sailun sits at the mid-to-high end, priced 15%–20% above mainstream domestic brands, and its flagship liquid-gold tire lines benchmark Pirelli. In H1 2026 its gross margin rose to 26.99%, and the company said the liquid-gold tires bring a premium space. Leading tire makers have also expanded overseas capacity this year to raise global share. Sailun's Egypt phase 1 is in production; phase 2, planned for 7.05 million radial tires a year, entered construction in October; phase 3 plans about 27 million semi-steel tires, 1.65 million all-steel tires and 20,000 tonnes of OTR tires, in planning and promotion. This is its fifth overseas base and its largest single overseas manufacturing plant globally. Linglong, Sentury, Giti (000589.SZ), Aeolus and Triangle have also announced plans to build plants in Egypt, Morocco, Turkey and Cambodia. On the OEM side, Sailun supplies overseas plants of Caterpillar and CNH; Linglong's Serbia plant has won European OEM orders; Sentury said its Turkey project is mainly for OEM fitments.

The three core raw materials natural rubber, synthetic rubber and carbon black remain high-range. iFind data show the November 11 natural rubber spot quote at CNY 18,966.67 per tonne, up CNY 425 from the previous trading day, +2.25% over the past week and -5.13% over the past month. Carbon black benchmarked CNY 10,557.14 per tonne on November 11, -9.71% month on month and +24.41% over the past 90 days. Synthetic rubber: the domestic futures main contract was quoted around CNY 16,200 per tonne on November 10, down 6.3% from the CNY 17,290 per tonne contract price in late October. Analysts hold that despite some pullback, the three materials lack a clear one-sided driver in the short term and are expected to keep oscillating high; on the product side, as hikes land, overseas capacity ramps up and cost controls take effect, some leaders retain a strong cost edge and will keep raising global share, while small and mid-sized tire makers remain strained and more capacity may exit.

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