Semi-Steel Tires Surge, All-Steel Tires Struggle

Following the New Year's Day holiday, the operating rate of domestic tire companies gradually recovered from its pre-holiday lows, showing a steady upward trend. However, significant structural differences exist within the industry. Semi-steel tires (passenger car tires) saw a larger increase in operating load, supported by strong export orders, while all-steel tires (truck tires) were constrained by both the domestic seasonal off-season and high inventory pressure, resulting in a slower recovery. The industry exhibits a stark contrast.

Latest industry monitoring data shows a clear upward trend in operating rates, but with significant structural differences. As of January 15, 2026, the operating load of semi-steel tire companies in Shandong reached 74.35%, a significant increase of 6.35% from the previous week.

Although slightly lower than the same period last year by 4.09%, the recovery momentum is strong. The operating load of all-steel tires was 62.84%, only a slight increase of 2.30% from the previous week, and a year-on-year increase of 2.78%, showing a significantly weaker recovery. This divergence is not a short-term phenomenon but rather the result of multiple factors, including demand structure and market environment.

The strong performance of semi-steel tires is mainly supported by strong export orders. In recent years, the Belt and Road Initiative has become a core driver of my country's tire exports. From January to September 2025, the proportion of semi-steel radial tires exported to Belt and Road countries reached 60%, with particularly strong demand in markets such as Brazil and Russia.

Brazil accounted for 6.55% of total semi-steel radial tire exports, and Russia accounted for 4.56%. Simultaneously, the explosive growth in domestic passenger car exports created a ripple effect. From January to September 2025, my country exported 4.866 million passenger cars, a surge of 76.40% year-on-year, directly boosting demand for semi-steel radial tires. Furthermore, some manufacturers have inventory shortages of large-size semi-steel radial tires, coupled with year-end stockpiling demand, further driving up operating rates.

In stark contrast to semi-steel radial tires, the all-steel radial tire market remains mired in a predicament of "cold demand and high inventory." Entering the deep winter season, the operating rates of upstream industries such as outdoor infrastructure and processing have declined, long-distance freight demand is weak, and the low temperatures lengthen tire wear cycles, leading to a significant contraction in replacement demand for all-steel radial tires.

Sales in northern regions such as Northwest and Northeast China have even experienced a precipitous drop. Inventory pressures have further exacerbated the situation. As of December 25, 2025, the average inventory turnover days for all-steel tire manufacturers rose to 43.78 days, an increase of 1.87 days compared to the previous period.

One distributor bluntly stated, "Tires are piled up to the ceiling in the warehouse; you have to walk sideways." With the Spring Festival approaching, distributors are focusing on collecting outstanding payments, leading to a decline in their willingness to actively stock up, creating a vicious cycle of "unable to sell, afraid to stock up."

Cost pressures have further intensified the operational difficulties of all-steel tire manufacturers. Prices of core raw materials such as natural rubber and carbon black have fluctuated at high levels, and although they have slightly declined, they remain at historically high levels, significantly compressing profit margins. Semi-steel tire manufacturers, on the other hand, are relatively more resilient to cost pressures due to the premium pricing power of export orders.

Looking ahead to the short term, the market structure is unlikely to see a substantial reversal before the Spring Festival. Semi-steel tire manufacturers are expected to maintain a high operating rate, but they need to be wary of the risk of fluctuations in overseas demand. All-steel tire manufacturers, however, are focused on reducing inventory, limiting their ability to increase operating rates.

In the medium to long term, with the recovery of infrastructure projects after the start of spring and the arrival of the commercial vehicle replacement cycle, the demand for all-steel tires may gradually recover, while the growth momentum of semi-steel tires will continue to rely on the expansion of export markets and the release of demand for new energy vehicles. The industry differentiation pattern will continue for some time.