As we enter 2024, the prices of raw materials for tire manufacturing have generally increased, leading to rising processing costs for tire companies.
According to statistics, as of September 25, the production cost for tire manufacturers was 1,019.85 RMB per ton, a 14% increase from the beginning of the year.
Among the raw materials:
Natural rubber STR20# mixed rubber reached 16,750 RMB per ton, up 35% from the start of the year.
Styrene-butadiene rubber (SBR) 1502 in North China is priced at 16,350 RMB per ton, up 32%.
Solution-styrene butadiene rubber (SSBR) in North China costs 16,000 RMB per ton, a 31% increase.
Carbon black is priced at 8,600 RMB per ton, up 1% from the start of the year.
Due to the lackluster performance of the end consumer market, the cost pressure from raw materials has not been effectively passed down, resulting in continuously squeezed profits for tire companies. As of the end of August, the processing profit for all-steel tires was a loss of 33.87 RMB per ton, marking a six-month consecutive loss.
Analysis points out that raw material prices remain strong, and it is expected that the loss situation for downstream tire manufacturers will continue in the short term. Moreover, as the end consumer market for tires shows only average performance, tire companies’ ability to recover profits remains limited.
Tire World Network has learned that, under pressure from rising costs, more than 20 tire companies have announced price hikes. Most of the price increases took place in October, with the highest increase reaching 6%.
