Natural Rubber Prices Hit Near 9-Year High, Tire Companies Raise Prices Collectively
Core Event: Since October 2026, natural rubber futures prices have continued to strengthen, briefly breaking through the 20,000 yuan per ton mark and reaching their highest level since March 2017. As of October 8, the main rubber contract on the Shanghai Futures Exchange closed at 20,145 yuan/ton, with a cumulative year-to-date gain of over 28%. Driven by the sharp rise in raw material costs, the downstream tire industry has seen its fourth concentrated round of price increases this year since September, with more than 60 tire companies issuing over 70 price adjustment notices, covering all-steel tires, semi-steel tires, off-the-road tires and other categories, with adjustment ranges generally between 2% and 5%.
Drivers of the Rally: The current rubber price increase is the result of long-term structural supply-side issues combined with short-term climate disruptions. The underlying reason is that global natural rubber supply has entered a contraction cycle, with serious aging of rubber trees in major producing countries, insufficient new planting area, and a "ceiling" on production capacity becoming apparent. The direct catalyst is the super El Niño event that formed in September 2026, with the market concerned that high temperatures and drought in major Southeast Asian producing regions will suppress tapping operations and further tighten supply. Data from the Association of Natural Rubber Producing Countries (ANRPC) shows that global natural rubber production is expected to grow by only 0.6% in 2026, far below previous expectations, while demand is projected to reach 15.356 million tons, leaving a supply-demand gap of approximately 317,000 tons for the year.
Industry Impact: Cost pressures are being transmitted down the supply chain, but the absorption is not smooth. Natural rubber, synthetic rubber, and carbon black together account for more than 60% of tire production costs. Despite the密集 [dense] wave of price increases by tire companies, the increases are insufficient to fully cover the rise in raw material costs. Zhongce Rubber, for example, saw its third-quarter net profit plunge 65.3% year-on-year, with the company acknowledging that price increases have "not yet fully offset" the adverse effects of raw material price hikes and exchange rate fluctuations. The China Rubber Industry Association also noted that the current end market shows a phenomenon of "active announcements of price increases but lagging implementation," as channel players need to digest previously stocked low-priced inventory, and actual price transmission is not smooth