The prices of core tire raw materials such as natural rubber, carbon black, and synthetic rubber will experience a rare synchronous increase in 2026. These are all tire raw materials, which account for over 70% of tire production costs. The drastic fluctuations in the raw material side directly triggered collective price adjustments by downstream enterprises. Since September, more than 60 tire companies have issued over 70 price increase letters, covering all steel tires, semi steel tires, and engineering tires, with price adjustments generally ranging from 2% to 5%.

Three major raw material prices rise synchronously

The simultaneous rise of natural rubber, synthetic rubber, and carbon black has led to a sudden increase in costs for tire companies. Recently, due to the impact of the global market, the prices of our main raw materials for production, such as natural rubber, synthetic rubber, and carbon black, have continued to rise significantly, leading to a sharp increase in tire manufacturing costs

Specifically, the increase in carbon black is due to cost pressures. Carbon black has risen by over 75%, reaching a six-year high. The core reason lies in the skyrocketing of its raw material coal tar. Huachuang Securities pointed out that due to the tight supply of Shanxi coking coal, coking coal prices have continued to rise, and many coking plants have reduced production due to losses, directly leading to a shortage of coal tar sources. According to data from the China Rubber Industry Association, based on the market price of coal tar in early September, the entire carbon black industry suffered a loss of over 120 million yuan in September.

The rise of natural rubber is due to price expectations. As of October 9th, the cumulative increase of natural rubber this year has reached 28.27%, setting a new nine-year high. However, industry insiders point out that the current import volume and domestic output of rubber have not significantly decreased, and the price increase is more of an expected reflection. In terms of industrial cycle, the growth of global rubber tree cutting area has slowed down, and the supply has entered a contraction cycle; In terms of climate, excessive rainfall in the main production areas of Southeast Asia affects the number of days for rubber cutting; Macroscopically, the influx of funds into commodities under the expectation of loose global liquidity has amplified price fluctuations. Guangfa Futures further pointed out that the sensitivity of rubber prices to weather disturbances has been significantly amplified.

The rise of synthetic rubber is due to geopolitical issues. The situation in the Middle East continues to fluctuate, and the passage of the Strait of Hormuz is blocked, leading to a sharp rise in international oil prices. Synthetic rubber is generally affected by international oil prices, with an increase of 15% to 20%. Butadiene, as a byproduct of petroleum cracking, is the core raw material for synthetic rubber. Its price increased by over 100% in the first quarter, driving up the price of synthetic rubber significantly. According to the International Monetary Fund, high oil prices may continue until 2027.

The price increase of natural rubber, synthetic rubber, and carbon black is compounded, and the cost pressure on tire companies is obvious. This is also the fundamental reason why more than 60 companies collectively sent letters and more than 70 price increase letters covered all categories.

How long will the high level of raw materials last?

Wei Yu, a senior researcher at CITIC Futures, pointed out that the fourth quarter is more likely to be a "further validation of expectations". Based on current fundamental analysis, this premium may continue to exist. The upper space needs to be dynamically measured, with a focus on direction, but the fault-tolerant space narrows, and rhythm is more important than direction.

From the perspective of natural rubber cycle, the supply contraction under the aging of tree age structure is the main theme in the mid-term. The newly added planting area in major producing countries has continued to shrink since the peak of rubber prices in 2011-2012, and the age of globally available rubber trees has been aging year by year. If the super strong El Ni ñ o is confirmed to have formed, and the peak period from November to December causes substantial disturbance to rubber cutting, the narrative of supply tightening will be further strengthened.

The long-term maintenance of positive growth in natural rubber consumption depends on whether downstream market demand can keep up. In terms of terminals, the global car ownership continues to rise, and the increasing penetration rate of automobiles in emerging markets (India, Southeast Asia, Africa) and infrastructure investment drive the demand for heavy-duty trucks/engineering tires, providing stable incremental demand for natural rubber. In addition, the demand for replacement tires accounts for more than 70% of the tire demand, with rigid attributes of consumer goods and small cyclical fluctuations.

The signal of carbon black shows differentiation. According to data from Shengyi Society, the benchmark price of carbon black on October 1st was 11692.86 yuan/ton, an increase of about 59.74% year-on-year. Zhuochuang Information pointed out that in September, the cumulative increase of high-temperature coal tar in Shandong was about 45%, corresponding to an increase of 3000 to 4000 yuan/ton in carbon black costs. Carbon black enterprises have fallen into a historical loss high in executing low-priced orders in the early stage, and mainstream large factories have a strong willingness to push up prices. But after entering October, coal tar prices experienced a narrow correction, and the carbon black market turned weak and consolidated after the holiday. On October 10th, the price range of N330 in Shandong region fell back to 9500 to 9700 yuan/ton. Whether carbon black can strengthen again depends on whether the coking coal supply guarantee policy can alleviate the dilemma of loss and production reduction in coking plants, as well as the procurement pace of tire factories under cost pressure.

The core variable of synthetic rubber is still the game between geography and butadiene. On October 9th, Guotai Junan Futures reported that there have been fluctuations in the Middle East's geopolitical situation, with international crude oil entering a high volatility pattern and synthetic rubber prices remaining relatively strong. However, the flow of funds determines asset prices, leading to an overall wide volatility pattern. Within the industrial chain, the fundamentals of butadiene have experienced negative feedback and weakened. The production rate of synthetic rubber has declined due to a lack of raw materials and high prices, and it is expected that butadiene prices will enter a volatile pattern after falling. Guomao Futures believes that if there is a second round of capital explosion due to geopolitical situation or El Ni ñ o speculation, the elasticity of synthetic rubber prices will still increase again. Strategically, it is recommended to buy on dips in batches and allocate put options for hedging protection.

Overall, the common feature of the three major raw materials in the fourth quarter is that "expectations have been fully priced, and actual data is yet to be verified". Natural rubber depends on the pace of production in the production area, carbon black depends on the supply of coking coal and the restoration of coking operations, and synthetic rubber depends on the struggle between geopolitical disturbances and negative feedback from butadiene. It is difficult for the raw material side to trend downward in the short term, but the differentiation between varieties will further increase.

Industry differentiation is accelerating

Previously, due to the impact of rising raw material prices, tire companies had issued numerous price increase letters. As of mid May, over 80 tire companies have announced price increases ranging from 2% to 10%. The price increase of more than 60 tire companies this time is still not enough to make up for the cost pressure caused by the increase in raw material prices.

Taking the most common 12R22.5 specification all steel truck tire on the market as an example, the production cost per tire in August was about 989.44 yuan, while the wholesale price in the market during the same period was only about 908.66 yuan. Selling one resulted in a direct loss of 80.78 yuan. According to the monitoring of Longzhong Information, the production cost of a single all steel tire increased by about 9.2% in September compared to August, while the mainstream price increase announced this round is only 2% to 5%, and the price adjustment range is obviously unable to keep up with the increase in raw material prices. The process of delivering the price increase letter to the terminal is also full of friction. The average inventory of dealers remains below 40 days, and there is significant pressure on the channels.

Behind the collective price increase of tire companies, industry differentiation is accelerating. According to data from Longzhong Information in September, some top and listed companies rely on their scale advantages and overseas factory profits to support their overall production, and the overall operation is still relatively stable; The scope of losses for small and medium-sized enterprises is expanding, and they are passively controlling production to reduce losses. The utilization rate of full steel tire production capacity is only 58.47%, while the utilization rate of semi steel tire production capacity is 63.04%, a year-on-year decrease of 7.92 and 9.60 percentage points respectively. The industry generally estimates that the operating range for stable profitability of semi steel tires is 70% to 80%, and currently most small and medium-sized factories are below the profit and loss threshold. Order growth is mostly concentrated in top enterprises, and small and medium-sized factories still face a shortage of orders.

Caitong Securities believes that the global demand for tires in the first half of 2026 will be 920 million, a slight increase of only 0.2% year-on-year. After the sharp rise in oil prices in the second quarter, the overall profitability of the industry will be under pressure, and top tire companies with overseas bases and increased production capacity will have stronger operational resilience. In the third quarter, the replacement market entered the peak sales season, and multiple companies achieved cost transmission by sending price increase letters. However, there is a lag in price increases, and it is expected that most companies' revenue will continue to grow while profits will still be under pressure. With the implementation of the anti subsidy tax rate, the scarcity of overseas production capacity will be further highlighted.

Zhongtai Securities pointed out that the performance of leading tire companies exceeded expectations in the second quarter, and the differentiation intensified in the third quarter. They are optimistic about Europe's price increases to resist cost disturbances. Tires, as an export chain product with a valuation of less than 10 times, have a double chance of breaking through the high-end trend for top tire companies in 2026. The average elasticity of top performance is about 30%, and the valuation is expected to increase to 15 to 20 times.

Behind this wave of price increases, top companies may use overseas production capacity and high-end products to transform cost pressures into share expansion, while small and medium-sized enterprises may accelerate their clearance.

(The author of this article is a researcher at the Jingguan Research Institute)