# All-Steel Tires: Rising Production Costs and Strong Price Appreciation Expectations

All-Steel Tires: Rising Production Costs and 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, leading to lower actual transaction prices. However, as the prices of major raw materials for tires continue to rise, tire companies are gradually depleting their inventories of low-cost raw materials purchased earlier. In April, tire production costs are expected to increase significantly, which may drive prices upward.

Actual transaction prices decreased in March, expected to rebound in April

In 2025, raw material prices for tires will remain volatile but within a limited range. Meanwhile, the tire market performance remains average, with fierce industry competition. Tire companies mainly focus on maintaining sales. The transmission of raw material price changes to tire prices takes time, so overall, the prices of all-steel tires have remained relatively stable for several months. However, after the Spring Festival in March 2026, companies actively held ordering meetings to boost sales, offering certain discounts. Additionally, in Q4 2025, raw material prices declined, prompting tire companies to stockpile low-cost raw materials. By March 2026, tire production was primarily 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, raw material prices 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. Moreover, 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 pressure on tire prices. Under cost pressures, most all-steel tire companies have issued price increase notices. Expectations of price hikes in April are strong.

Raw material prices have surged broadly, potentially 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. Particularly in March, geopolitical tensions in the Middle East intensified, leading to increased oil supply shortages, 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. 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, an 8.64% increase from the low point at the end of 2025, significantly supporting higher tire prices.

Cost pressures are transmitting to the market, leading to expectations of price increases in April

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 in the trade 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 continuous rise in raw material prices has driven costs upward, persisting through March. As earlier low-cost raw materials have been largely consumed, April production will mainly rely on higher-priced raw materials, increasing cost pressures for tire companies. To mitigate these costs, many companies have issued price increase notices.

Additionally, as ordering meetings wind down and the market enters a stock depletion phase, the short-term transmission of price increases to the market has slowed. However, due to cost pressures, all-steel tire companies have announced price hikes for April, which may lead to a general increase in factory prices. Market vendors will be forced to accept higher prices, raising procurement costs in the trade segment. 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.

(Editor: Wang Zhiqiang HF013)

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