All-Steel Tires: Production Costs Continue to Rise, Strong Price Increase Expectations

All-steel tires: Rising production costs with strong price increase expectations

[Introduction] In March, the market experienced a small peak in demand after the Spring Festival, with many companies holding traditional ordering meetings. During these meetings, tire market prices offered certain discounts, and actual transaction prices slightly declined. However, as the prices of major raw materials for tires continue to rise, tire companies are gradually depleting their low-cost raw material inventories purchased earlier. In April, tire production costs are expected to increase significantly, potentially driving prices upward.

Actual transaction prices declined in March; rebound expected in April

In 2025, raw material prices for tires will remain somewhat volatile, but with limited overall fluctuations. Meanwhile, the tire market performance is average, with fierce industry competition. Tire companies mainly focus on maintaining sales. Additionally, the transmission of raw material price changes to tire prices takes time, so overall prices for all-steel tires have remained relatively stable for several months. However, after the Spring Festival in March 2026, active ordering meetings were held to boost sales, and some discounts were offered. Coupled with the decline in raw material prices in Q4 2025, tire companies stocked up on low-cost raw materials. By March 2026, tire production was mainly based on low-cost raw materials, providing room for price concessions on all-steel tires. As a result, actual transaction prices for all-steel tires showed a downward trend.

Since January 2026, the prices of major raw materials for tires have continued to rise, reaching high levels by March. Some synthetic rubber prices in March increased by over 40% compared to the end of 2025, significantly raising production costs for all-steel tires. Additionally, by April, the low-cost raw materials used earlier had been exhausted, and production was mainly based on high-cost raw materials, further increasing costs and exerting a strong upward influence on tire prices. Under cost pressure, most all-steel tire manufacturers have issued price increase notices. Expectations of price hikes in April are strong to offset rising costs.

Raw material prices surge broadly, possibly supporting higher all-steel tire prices

In the composition of all-steel tires, raw materials account for the largest proportion: natural rubber at 32.5%; carbon black at 20.5%; steel cord at 17.4%; synthetic rubber at 13.2%; and other chemical raw materials at 16.5%.

Data shows that since January 2026, the prices of major raw materials for tires have risen across the board, reaching high levels by March. In March, geopolitical tensions in the Middle East intensified, leading to increased oil supply gaps, which reduced the supply of butadiene and coal tar, causing synthetic rubber and carbon black prices to rise sharply. Among tire raw materials, only natural rubber prices declined slightly, but the decrease was limited and insufficient to change the overall cost trend. Overall, the production costs for all-steel tires have widened significantly. According to data models from Zhuochuang Information, based on March 20 raw material prices, the estimated total production cost for a single all-steel tire (12R22.5, weight 65 kg) is approximately ¥966.89, representing an 8.64% increase from the low point at the end of 2025, which strongly supports higher tire prices.

Cost pressures are transmitting to the market, with April expected to see price increase expectations for tires

The price of all-steel tires is mainly influenced by market demand and production costs. Historical data shows a strong correlation between production costs and purchase costs of all-steel tires. Price changes generally follow production costs with a lag of about three months, depending on raw material fluctuations and market feedback. Since January 2026, the prices of various key raw materials have continued to rise, driving costs upward through March. With earlier low-cost raw materials largely consumed, April production mainly involves higher-priced raw materials, creating significant cost pressures for tire companies. To mitigate these costs, many have issued price increase notices.

Additionally, as ordering meetings wind down and the market shifts to inventory depletion, the short-term transmission of price increases to the market has slowed. However, due to cost pressures, all-steel tire manufacturers have announced price hikes for April, and factory prices may rise across the board. Market vendors will be forced to accept higher prices, and the cost of purchasing in the trade segment will increase. Nonetheless, since terminal demand has not significantly increased, the transmission of price hikes to the end market may face resistance. Some of the price increase pressure may be absorbed by distributors, preventing a full pass-through to end consumers.