Rubber Approaches 20,000 Yuan, Oil Price Nears $100, Tire Price Hike Wave "Cannot Be Contained"

September 8, two "heavy bombs" landed simultaneously: Brent crude approached $100/barrel intraday, natural rubber main contract closed up 2.75%, quoted at 19,635 Yuan/ton, both hitting new phase highs. Under the surge of raw materials' "dual engines", two tire companies announced price hike letters on the same day. The third round of price hikes in the tire industry this year is now unstoppable.

Rubber Approaches 20,000 Yuan, Rubber Series "Three Brothers" Surge Together

September 8 closing, Shanghai Futures Exchange natural rubber main contract quoted at 19,635 Yuan/ton, up 2.75%, intraday high touched around 19,700 Yuan, one step away from the 20,000 Yuan threshold, single day turnover reached 77.22 billion Yuan.

The day before (September 7), the rubber series had already staged a collective surge: Natural rubber main contract closed at 19,180 Yuan/ton, up 2.18%; No. 20 Rubber main contract set a new record since listing, closed at 16,345 Yuan/ton; Synthetic rubber intraday approached 8%, closed at 15,605 Yuan/ton, up 4.59% for the day. Three varieties surged collectively and broke through the high-level oscillation zone within a day, which is rare in the past two years.

Guotai Junan Futures Analysts Point to Three Drivers:

First, synthetic rubber fundamentals are relatively strong. High oil prices pushed up the core raw material butadiene price, synthetic rubber processing profits continued to decline, some private enterprises operated at reduced capacity, supply side shrank, and market anxiety over spot liquidity intensified.

Second, natural rubber raw material side is firm. Hat Yai main producing areas had excessive rainfall and tapping was hindered, Hat Yai rubber glue prices rose from 75 Baht at the start of the month to 77.7 Baht; El Niño production cut expectations continued to ferment, impact intensity expected to peak in September-November, production cut logic difficult to disprove in the short term.

Third, the price hike atmosphere in the industrial chain is formed. Around September 1, over 25 tire enterprises such as Triangle, Double Star, Aeolus centrally adjusted prices by 2%-3%, strengthening bullish sentiment.

Different from the price hike wave in March-April, this time natural rubber and synthetic rubber resonated synchronously. According to Zhuochuang Information data, comparing September 3 with August 3, Shandong STR20# Blended Rubber rose 8.75%, Styrene Butadiene Rubber 1502 rose 16.67%, Polybutadiene Rubber rose 20.65%, Carbon Black N330 rose 16.89% — the four major core raw materials all surged heavily, none were "gentle".

Oil Price Nears $100, Goldman Sachs Forecasts $120

September 8, Brent crude intraday high touched $99.42/barrel, one step away from the $100 threshold, year-to-date gain nearly 100%; NY crude futures rose over 3%. On the same day, A-share oil and gas sector surged, Huajin Shares, Heshun Petroleum, Zhongman Petroleum hit limit up, Tongyuan Petroleum, Guanghui Energy and other stocks rose over 5%.

The direct trigger is the rapid escalation of the Middle East situation: Saudi energy facilities attacked by Houthis, partial facility operations interrupted, causing 73 injuries; meanwhile, US-Iran standoff over the Strait of Hormuz continued, US military required 94 commercial ships to alter course in blockade actions.

Goldman Sachs warned that if attacks escalate further, oil price may rise to $120/barrel; China Merchants Futures pointed out that if Yanbu Port exports continue to be hindered, supply reduction could expand to 3-4 million barrels/day. Plus OPEC+ announced October production halt — this is the first since production increase started in April this year, oil price upside risk is significant.

Price Hike Letters Land Again, Another "3% Hike"

Under cost pressure, two tire companies announced price hikes simultaneously on September 8:

Fangxing Rubber announced that due to continued rise in raw material prices such as rubber, carbon black, steel cord, starting from September 12, semi-steel, full-steel, and engineering tire series prices were adjusted upward by 3%;

Shandong Weihai Rubber announced that "Hongying", "OPALS", "HIMALAYA" brand full-steel radial tires increased by 3% starting from September 12.

This is the third centralized price hike in the tire industry since late August this year. But the gap between cost and selling price remains glaring: Zhuochuang Information calculates that on September 3, production cost of a single full-steel tire was about 984.97 Yuan, up 9.21% in one month, up 13.87% year-on-year. Cost rose nearly 10 points, selling price only rose 2-3 points, some economic tires already showed real losses like "losing 80 Yuan per tire sold". Some enterprises said frankly: Tire prices need to rise at least another 16% to cover costs, and 20% increase is needed to achieve profitability.

Industry insiders point out that raw materials are unlikely to fall in the short term, but weak demand constrains transmission, price hikes will show a pattern of "multiple batches, small amplitude" rotation, industry reshuffling accelerates. For dealers, the dense period of price hike letters is both opportunity and trap, reasonable stocking, cash flow is king, maintain flexibility to navigate the cycle.