Can't Hold Anymore! Global Tire Price Hike Wave Spreads

Wave after wave of raw material price hikes are pushing the tire industry to high cost levels. Carbon black hits a 6-year high, natural rubber returns to the 20,000 yuan threshold for the first time in 9 years—the price hike spreads from factories to distributors, from domestic markets to the global stage. On October 8, CCTV Business News focused on the collective price hike by over 60 tire enterprises in China. According to statistics, since September, over 60 tire enterprises have collectively issued 114 price hike letters, covering all categories of all-steel tires, semi-steel tires, and engineering tires, with adjustment amplitudes generally between 2%-5%.

Raw Material "Double High": Carbon Black Rises, Natural Rubber Takes Over

Carbon black is the first link to be ignited. On October 1, the carbon black benchmark price was quoted at 11,692.86 yuan/ton, a year-on-year increase of about 59.74%, still at the highest level in 6 years; in September, the entire carbon black industry is expected to incur losses exceeding 120 million yuan, and Cabot has already announced a special carbon black price increase of 5,800 yuan per ton.

Natural rubber followed closely. On October 9, the Shanghai rubber main contract closed at 20,645 yuan/ton, setting a new high in nearly 9 years; the average spot price of natural rubber increased by 31% year-on-year.

Supply contraction is the main cause: floods in eastern Thailand affected about 23,000 hectares of rubber plantations, compounded by the 6-8 years required for rubber trees to start tapping, and the increased proportion of aging trees in main producing areas, resulting in severe lack of supply elasticity.

Over 100 Price Hike Letters Issued, Full Chain Transmission

In September alone, over 100 price hike letters were issued, becoming the densest price hike month in history. The pace of price increases accelerated significantly: mainstream in September was about 3%, generally jumping to 6% in October. During the National Day holiday, over 20 enterprises continued to issue letters, 9 of which were for a second price hike.

New changes appeared in the channel end: distributors such as Jilin Lunda and Shandong Zhenghe'an followed the price hike actively for the first time, changing the price hike from one-way transmission by manufacturers to full-chain transmission; Wanda Baotong, Guizhou Tire and other enterprises refused prepayment price locking, cutting off the distributor's price locking path. The price hike also spread globally; Hankook, Bridgestone, and Yokohama successively raised prices; Goodyear and Nexen followed suit in the Chinese market.

Cost-Selling Price Scissors Gap, Enterprises Take Multiple Measures for Self-Rescue

Enterprise comprehensive cost increases have exceeded 20%, while price hike letter amplitudes are generally only 3%-5%, the difference is fully digested by the manufacturing end, many products "produce one order, lose one order". The factory response is to reduce production in advance: by the end of September, the capacity utilization rate of semi-steel tires and all-steel tires dropped to 52.60% and 48.68% respectively.

More enterprises are turning to diversified strategies: changing from production scheduling based on quarterly total to production scheduling based on orders; locking raw material costs through futures hedging; increasing R&D to launch tires compatible with new energy vehicles, focusing on the high-end matching market to hedge cost pressure.

"Involution" Attracts Attention, Industry Reshuffling Will Accelerate

Behind the price hike wave is the industry's dilemma of "increasing revenue without increasing profits". According to statistics from the China Rubber Industry Association, industry output value grew by 5.48% year-on-year from January to August, while total profit fell by 10.84%. Low-price vicious competition has already attracted high-level attention, and the meeting of the Central Finance and Economics Committee clearly proposed to "govern enterprise low-price disorderly competition according to laws and regulations".

Association President Xu Wenying pointed out that structural imbalance, blocked exports, "winning bids solely on low price", etc., are the roots of involution, urging enterprises to break through with differentiation and branding, and the industry to shift from "competing on price" to "competing on quality and innovation".

Industry insiders expect, high costs may last through the fourth quarter, small and medium enterprises will accelerate capacity clearance, and industry concentration is expected to rise in the reshuffling. The most pressure is still on those small and medium tire enterprises that have neither overseas capacity nor bargaining power.