Heavy Truck Drives Steel Tire Recovery

Heavy-duty trucks are the core downstream market for all-steel tires. In 2024, the all-steel tire market in the heavy-duty truck sector reached 82.35 billion yuan, accounting for 64.2% of the total market. This structural dependence directly impacts heavy-duty truck sales on tire demand.

The average 39% growth rate of the heavy-duty truck market from April to September 2025 is driving tire demand through two main pathways:

In the tire market, assuming that each heavy-duty truck requires 8-12 all-steel tires, the 105,000 heavy-duty trucks sold in September alone generated an additional demand of 840,000 to 1.26 million tires.

In the first half of the year, cumulative heavy-duty truck sales reached 533,000 units, driving demand for 4.26 million to 6.4 million tires, directly boosting the operating rate of all-steel tire manufacturers to 65%. Leading companies such as Linglong and Sailun, fueled by ample tire orders, have achieved capacity utilization rates far exceeding the industry average.

In the replacement market, heavy-duty truck prices have seen six consecutive increases, driven by a recovery in logistics demand and the retirement of older vehicles. Domestic road freight volume is expected to grow by 5.2% year-on-year in 2024.

Coupled with the implementation of the National IV vehicle replacement policy, the activity of existing heavy-duty trucks has increased, shortening tire replacement cycles. The replacement market accounts for over 70% of total demand for all-steel tires, and the resilience of this sector will continue to generate incremental growth.

Multiple Positive Factors: Supporting the All-Steel Tire Market's Recovery

In addition to heavy-duty truck sales, cost dividends and structural upgrades are strengthening the recovery momentum of the all-steel tire industry:

Easing cost pressures are a key driver. Prices of major raw materials such as natural rubber and synthetic rubber have continued to decline since the end of 2024, with the all-steel tire raw material price index falling by 5.6% month-on-month in the first half of 2025.

It is estimated that for every 6% reduction in raw material costs, without downstream transmission, companies' gross profit margins can increase by 3.59 percentage points, creating room for tire companies to recover their profits.

The transition to new energy vehicles is opening up new opportunities. By June 2025, the penetration rate of new energy heavy-duty trucks had reached 26.03%, with sales surging 186% year-on-year in the first half of the year.

Due to their frequent braking and heavy loads, new energy heavy-duty trucks place higher demands on tire wear resistance and safety, driving a 12.5% ​​year-on-year increase in demand for specialized all-steel tires. Policies such as highway toll reductions in Henan and right-of-way priority in Sichuan have further accelerated this process, providing tire companies with a path for technological upgrades.

The export market remains resilient. Although replacement sales of truck and bus tires in Europe declined by 4% in the first half of the year, Chinese all-steel tires, with a 30%-50% price advantage, continue to break through in emerging markets such as Southeast Asia and Africa.

All-steel tire exports are projected to grow at a compound annual growth rate of 8.1% from 2020 to 2024, with leading companies expanding overseas production capacity to offset the impact of trade barriers in some regions.

Hidden concerns remain: bottlenecks in the recovery of the all-steel tire market

It is important to note that the all-steel tire market has not yet fully emerged from its sluggish inertia, and multiple challenges may constrain the extent of its recovery:

Prominent supply and demand imbalances in traditional markets. In the first half of the year, sales in the domestic truck tire replacement market declined by 1.59%, with retail demand falling below 20 million units, a demand that would require only six months' production from just 10 companies.

However, with over 100 well-known domestic tire manufacturers, overcapacity has led to fierce competition, and most dealers are still facing high inventory pressures. While the supporting market has grown, profits remain slim, and listed tire companies are still facing the dilemma of "increased revenue and reduced profits" in the first half of the year.

Technology upgrade barriers are becoming a stumbling block for small and medium-sized enterprises. New energy heavy-duty truck tires require low rolling resistance and high-strength materials, necessitating continuous investment in R&D.

Leading companies like Haian Rubber have achieved global leadership in giant all-steel tires, but most small and medium-sized enterprises, due to insufficient technological reserves, are unable to share in the new energy vehicle market's dividends, further exacerbating industry differentiation.

Overseas market risks cannot be ignored. China's all-steel tire exports fell 7.33% year-on-year in June. Rising trade protectionism and a slowing global economy could dampen export growth. Furthermore, a rebound in raw material prices would rapidly erode corporate profits and weaken the foundation for recovery.