Product Price Hikes Fail to Offset Raw Material Surge: Tire Industry Profitability Under Pressure(Oct 23)

Product Price Hikes Fail to Offset Raw Material Surge: Tire Industry Profitability Under Pressure

Source: Securities Daily / China Industry & Information Network

Since September, over 80 tire companies have issued more than 100 price increase notices, covering all-steel tires, semi-steel tires, and engineering tires, with mainstream increases ranging from 2% to 5%, and some specifications rising by 6%. This marks the fourth round of price hikes in the tire industry this year.

On October 19 alone, multiple companies announced price increases. Guangzhou Wanli Tire Development Co., Ltd. announced a 2% to 5% increase on semi-steel domestic products starting October 23. Double Coin Group (Chongqing) Tire Co., Ltd. scheduled a 3% to 5% increase across all brands starting October 26. A distributor in Handan notified a 50 to 150 yuan per tire increase across all specifications effective October 22.

Zhu Hong, Deputy Secretary-General of the China Rubber Industry Association, stated that raw material price increases in 2026 have impacted the rubber industry. Natural rubber, synthetic rubber, and carbon black — the three main raw materials — have risen simultaneously, collectively accounting for over 60% of tire costs, with raw materials overall comprising more than 70% of production costs. As of the end of September, the raw material cost indices for both semi-steel and all-steel tires were up approximately 25% year-on-year.

On October 21, the benchmark price of natural rubber stood at 19,341.67 yuan per ton, up 1.27% from 19,100 yuan per ton at the beginning of the month, setting a newphase high. Carbon black maintained its high level at 10,807.14 yuan per ton.

Notably, the raw material cost increase has outpaced the product price increase. For small-specification products with high natural rubber content, such as motorcycle tires, terminal and OEM price increases lag behind, and the 2% to 5% adjustment is insufficient to cover costs. Ding Zhenyu, senior investment advisor at Jufeng Investment, noted that the current price hike is driven by cost pressure rather than end-user demand, with price transmission lagging by one to two months.

According to Longzhong Information monitoring, the average raw material cost index for all-steel tires from January to October was 13,646.69, up 9.78% year-on-year. Zhuochuang Information expects overall all-steel tire demand to weaken in October, with both OEM and replacement demand declining from September levels.

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