Raw Costs Drive Tire Prices
As a key component of vehicles such as automobiles, tires have attracted much attention for their price fluctuations. Among the many factors that affect tire prices, the cost of raw materials undoubtedly occupies a pivotal position.
The manufacturing of tires is a complex process that requires the synergy of multiple raw materials, among which natural rubber, synthetic rubber, steel and carbon black are the core components of tires.
In terms of proportion, natural rubber accounts for 28% of tire raw materials, and its price changes have a significant impact on tire costs. The price of natural rubber is affected by many factors, such as the growth cycle of rubber trees, the climatic conditions of the planting area, and the global supply and demand relationship of natural rubber.
If major natural rubber producing countries encounter bad weather, such as heavy rains and droughts, which affect the rubber production of rubber trees and reduce supply, prices may rise, thereby driving up tire production costs.
Synthetic rubber accounts for 26%, and it and natural rubber together provide tires with the necessary elasticity and wear resistance. The main price of rubber has a direct impact on the price of synthetic rubber.
For example, on July 12, 2025, the main price of rubber was 14,140 yuan per ton, which was higher than the price of about 13,000 yuan per ton since June. Although the price of 14,140 yuan is not extremely high in the rubber market, this price fluctuation will still be transmitted to the field of synthetic rubber.
The production of synthetic rubber is closely linked to petrochemicals. Fluctuations in oil prices, improvements in production processes, and changes in market demand for synthetic rubber will affect its price.
When the main price of rubber rises, the production cost of synthetic rubber increases, and production companies may increase the selling price of synthetic rubber. Tire manufacturers face higher raw material procurement costs, which are ultimately reflected in tire prices.
Steel accounts for 9% of tire raw materials and is mainly used for tire steel cords and other components to provide strength and support for tires. Steel prices are affected by many factors, including iron ore prices, steel industry production capacity, and national macro policies.
If the price of iron ore rises, the production cost of steel enterprises will increase, which will increase the ex-factory price of steel, and the cost of purchasing steel for tire enterprises will increase, which will lead to an increase in the cost of tire manufacturing, and the price of tires may also increase accordingly.
Chemical raw materials account for 14% of tire raw materials, of which carbon black is an important component. Carbon black plays a role in enhancing wear resistance, improving strength and improving tire anti-aging performance in tires. The price fluctuation of carbon black is affected by the price of raw materials (such as coal tar, etc.), environmental protection policies and market supply and demand.
In recent years, with increasingly stringent environmental protection requirements, some carbon black production enterprises have been restricted or stopped due to non-compliance with environmental protection standards, and the market supply has decreased. However, the demand for carbon black in industries such as tires continues to exist, resulting in an increase in carbon black prices and an increase in tire production costs.
As the first factor affecting the cost of tire manufacturing, any fluctuations in the prices of major raw materials such as natural rubber, synthetic rubber, steel and carbon black will be reflected in the price of tires.
Tire companies need to pay close attention to the dynamics of the raw material market and cope with the cost pressure caused by fluctuations in raw material prices by optimizing procurement strategies, improving production processes, and developing new materials, so as to maintain market competitiveness, stabilize tire prices, and meet consumer demand.
