Tire Industry Market Trends in May 2026

Analysis of the Tire Industry Market Status and Development Trends in May 2026.

Pricing: Cost Pressure Transmission Leads to Price Increases at the Terminal Level

Affected by the continued rise in prices of key raw materials such as natural rubber, synthetic rubber, and carbon black, as well as the increasing energy and logistics costs, the domestic tire industry entered a new round of price increases in May 2026. More than 80 domestic and foreign tire companies issued price adjustment notices, covering all categories of tire products.

This round of price adjustments showed a clear stratification: economy civilian tires generally increased by 30-50 yuan per tire, while tires suitable for mid-to-high-end passenger cars and commercial vehicles saw larger increases, ranging from 100-200 yuan per tire. The overall industry price adjustment remained stable at 5%-10%. Channel prices showed significant differentiation.

Small and medium-sized traditional retail stores, lacking economies of scale in purchasing, have weak bargaining power and limited standing inventory, making it difficult to effectively buffer against rising costs. They have already implemented price increases at the retail level. Large chain platforms like Tuhu Auto, relying on long-term large-scale direct procurement models and pre-locked-in pricing strategies, have maintained stable retail prices in the short term, effectively mitigating cost fluctuations.

From the perspective of the vehicle market, tires account for a relatively small proportion of the total material cost of a vehicle. Major automakers generally use quarterly and annual price-locked inventory strategies to mitigate the risk of raw material price fluctuations. Therefore, the current tire price increase has not yet been passed on to vehicle sales prices, and its impact on the overall vehicle pricing system is limited.

Supply and Demand Side: Increased Capacity Utilization, Off-Season Demand Pressure

In May, the industry exhibited a phase of "high operating rates and weak demand," with production levels significantly higher than the same period in previous years. Data shows that on May 15th, the operating rate of sample domestic semi-steel tire manufacturers reached 75.07%, significantly exceeding the average for the same period in previous years. Companies maintained a high production pace mainly to dilute unit production costs and offset the profit pressure brought by rising raw material prices.

Demand weakened as the traditional off-season for the automotive market arrived, with a slowdown in the shipment of replacement tires and OEM tires. Overall industry inventory accumulated slightly, and a supply-demand mismatch became apparent. Industry insiders generally expect factory operating rates to gradually decline. In terms of capacity, industry structural upgrades continued, with domestic semi-steel tire monthly production capacity steadily exceeding 50 million units.

Capacity utilization steadily increased from a low of around 60% to nearly 80%, with ineffective capacity being continuously cleared and supply-demand matching improving. However, the number of small and medium-sized manufacturers in the industry remains large, with a concentration of low-end, homogeneous products, and the competitive pressure from a temporary oversupply persists.

Raw Materials: High Costs and Concentrated Supply Pressure

In the second quarter of 2026, the tire raw material market was generally in a high-level fluctuation pattern, with intensified supply-demand competition between upstream and downstream sectors. Regarding natural rubber, the second quarter is the traditional peak season for rubber tapping in Southeast Asia and Hainan and Yunnan provinces in China, resulting in a concentrated release of raw material supply.

Coupled with the expected increase in imports due to the implementation of the zero-tariff import policy between China and Africa, market supply was relatively abundant, but prices remained high. The supply and demand situation in the synthetic rubber sector is weak, with both supply and demand for the core raw material, butadiene, being weak. It is expected that concentrated maintenance shutdowns of industry plants in June will further tighten supply.

Meanwhile, butadiene rubber is affected by cost inversions, leading to forced production cuts and a 7.3% month-on-month increase in industry inventory, highlighting structural pressure on the raw material side. To lock in production costs and mitigate the risk of subsequent price increases, leading domestic tire companies have significantly increased prepayments for raw materials.

In the first quarter, listed tire companies such as Sentury Tire saw a significant increase in prepayments for raw materials, directly resulting in a year-on-year increase in financial expenses and inventory write-downs, further increasing short-term operating cost pressures.

Competitive Landscape: Leading Companies' Advantages Become More Prominent, Industry Concentration Increases

Competition in the existing market is intensifying, with leading companies continuing to amplify their scale, technology, and cost advantages, formally forming a group of companies with revenues exceeding 10 billion yuan. Domestic leading companies such as Zhongce Rubber, Sailun Group, and Double Star Group have all exceeded 30 billion yuan in revenue, with the combined revenue of the top three companies approaching 200 billion yuan. Market share continues to concentrate towards the leaders, and industry concentration is steadily increasing.

Foreign brands are facing increasing operational pressure. International tire giants like Goodyear and Michelin are expected to incur hundreds of millions of euros in additional costs in the second half of 2026 due to rising global raw material and energy costs, further narrowing their overseas profit margins.

The industry's competitive logic is undergoing a profound transformation, gradually moving away from extensive scale expansion and towards value competition centered on technology and quality. Companies are focusing on high-end niche markets such as new energy quiet tires and low rolling resistance green tires, optimizing product performance and enhancing market premium through technological research and development.

Driven by both policy guidance and market forces, the tire industry's green, intelligent, and global transformation is accelerating. In terms of green development, China continues to eliminate outdated production capacity and strictly controls high-energy-consuming and high-polluting low-end production capacity, forcing companies to increase investment in renewable materials and low rolling resistance tire R&D, actively adapting to global carbon neutrality and development trends.

Regarding intelligent upgrades, technologies such as digital twins, intelligent manufacturing, and intelligent quality inspection are being fully implemented. Leading companies are effectively improving production precision and efficiency through the digital transformation of their production lines, continuously reducing operating costs such as labor and energy consumption.

Globalization has become a new growth driver. Domestic tire companies are actively breaking through international trade barriers. Projects such as Sailun's overseas production base in Egypt are steadily being implemented. By relying on the "localized production + global sales" model, they can both avoid trade barriers and get closer to overseas end markets. As a result, the global market share of Chinese tire brands continues to increase.