Rubber Price Rises Impact Tires
The proportion of raw materials determines the core position of tire cost
Tires, as an indispensable key component of automobiles, are significantly affected by the fluctuation of raw material prices. The raw materials that make up tires are rich and diverse, covering natural rubber, synthetic rubber, carbon black, steel and a variety of chemical raw materials.
Among these raw materials, natural rubber accounts for 28%, synthetic rubber accounts for 26%, and steel accounts for 9%. The total proportion of these three raw materials is as high as 63%. Chemical raw materials account for 14%, among which carbon black plays an important role in enhancing rubber performance in tire manufacturing. Therefore, the cost of raw materials can be regarded as the primary factor affecting the cost of tire manufacturing.
Rubber prices show a phased upward trend
Focusing on the rubber market, on July 22, 2025, the main price of rubber reached 15,060 yuan per ton. From the long-term price trend of the rubber market, the price of 15,060 yuan per ton is not high. However, since June this year, rubber prices have shown a trend of continuous rise, and have previously maintained at around 13,000 yuan per ton. This price increase trend not only affects the natural rubber market, but also directly drives up the price of synthetic rubber, as synthetic rubber is mutually substitutable with natural rubber to a certain extent, and its production is closely related to the price of natural rubber.
Multi-dimensional driving factors of rising rubber prices
There are many complex factors behind the rise in rubber prices. From the supply side, rubber trees are mainly distributed in tropical areas. Major rubber producing areas in the world, such as Southeast Asia, have been frequently attacked by extreme weather this year. Harsh climatic conditions such as heavy rains and droughts have seriously interfered with the normal growth of rubber trees, greatly affecting the smooth progress of rubber tapping operations, and significantly reducing the supply of natural rubber.
At the same time, the outbreak of pests and diseases has also brought serious harm to rubber trees, not only reducing the output of rubber, but also having a negative impact on its quality. In addition, with the development of social economy, labor costs have continued to rise. Rubber planting and production are labor-intensive industries. The increase in labor costs has caused rubber farmers to demand higher rubber purchase prices in order to ensure their own income, which has undoubtedly further promoted the rise in rubber prices.
Expansion on the demand side exacerbates the tension in the rubber market
On the demand side, rubber has a wide range of applications, and many industries such as automobiles, tire manufacturing, and medical devices have a large demand for it. In recent years, the global automobile industry has continued to develop, especially the new energy vehicle market has shown a rapid growth momentum. The substantial increase in sales of new energy vehicles has directly led to an increase in tire demand.
Because every car needs to be equipped with tires, the increase in the number of cars will inevitably expand the market demand for tires. Moreover, the vigorous promotion of infrastructure construction has also increased the demand for rubber-related products. For example, in some large-scale infrastructure construction projects, the demand for products such as rubber conveyor belts has risen sharply, which has also driven the rise in rubber prices to a certain extent.
The superposition of macroeconomic and market expectations
Macroeconomic factors and market expectations also have an important impact on rubber prices. When the global economic situation improves, the market demand for industrial raw materials such as rubber is generally expected to increase. Based on the judgment of future market demand growth, investors are more inclined to hold rubber-related assets, thereby driving up rubber prices.
At the same time, the easing of monetary policy has increased the liquidity of funds in the market, and a large amount of funds have flowed into the commodity market, including the rubber futures market. The influx of funds has further increased the price of rubber.
The tire industry faces cost transmission pressure
The rise in rubber prices has brought a huge impact on the tire industry. Tire manufacturers are facing a sharp increase in production costs. Since rubber accounts for a high proportion of the cost of tire raw materials, the rise in rubber prices directly leads to a sharp increase in tire production costs. In order to maintain the normal operation and profit margin of the company, many tire companies have to take price increase measures.
According to relevant statistics, many tire companies have announced product price increases, and the price increase varies depending on the company and product type. This has brought additional cost pressure to downstream companies in the tire industry, such as automobile manufacturers, tire dealers and consumers.
The increase in the production cost of automobile manufacturers' vehicles may affect their product pricing and market competitiveness. Tire dealers need to pay higher procurement costs. If this part of the cost cannot be fully passed on to consumers, their profit margins will be compressed. Consumers will need to spend more money to buy tires, whether for car tire replacement or new vehicle purchases.
Response and Prospects for Future Development of the Industry
Looking ahead, if rubber prices continue to rise, the tire industry may face more severe challenges. On the one hand, tire companies may further increase their investment in technology research and development, and strive to develop new materials to replace some rubber, or improve the utilization rate of rubber by improving production processes, thereby reducing dependence on rubber price fluctuations.
On the other hand, tire companies may also strengthen cooperation with rubber suppliers, and stabilize the supply and price of rubber by signing long-term supply contracts. For consumers, they may need to gradually adapt to the cost increase brought about by the increase in tire prices. At the same time, they can also pay attention to the new products and new technologies launched by tire companies and choose tire products with higher cost performance.
