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On October 10, Linglong Tire issued a TBR product price adjustment notice letter: starting from November 1, price increases of around 3% will be applied to some product series of all TBR brands in the domestic retail market.
This is the first letter in this round of price hikes that clearly schedules the implementation date for November. Price increase letters are still being released densely, and the schedule has already been pushed to next month.
01
Six Letters Clustered, October Schedule Fully Booked
For more than a week after the holiday, newly issued price increase notices appeared in a cluster.
Shandong Huasheng Rubber issued a letter on October 4, stating most frankly in the letter: Recently, the prices of major raw materials such as natural rubber, synthetic rubber, and carbon black have continued to rise, causing tire manufacturing costs to soar dramatically, resulting in significant losses; the company has decided to increase tire product prices by 3%—5% for all brand series starting October 5, and will adjust subsequently based on raw material price changes.
Yuelong Rubber announced a 3% price increase adjustment effective October 10, and clearly stated that prepayment is not accepted for this price hike; Huadong Rubber will increase prices by 5% for all series of all TBR brands in the domestic replacement market effective October 11, and the letter also hints that future price increases cannot be excluded due to continued raw material price hikes.
Xiongye Rubber Technology (Qingdao) increased prices for all TBR brand products in the domestic replacement market by 3%—5% effective October 12, based on the delivery date, not the order date.
Xiamen Cheng Shin Rubber plans to increase TBR product prices by 3% starting October 25, with subsequent adjustments depending on cost increases.
Among the six letters, TBR is the absolute protagonist. The implementation dates are scheduled from October 5 all the way to November 1, basically covering all of October plus early November.
02
Cost Index Increased by 30% Year-on-Year
The foundation of price hikes is still cost. On October 10, Longzhong Information's radial tire raw material cost index reported 16,552.14, Month-on-month +0.37%, Year-on-year +29.98%; all-steel tire raw material cost index reported 15,705.37, Month-on-month +0.08%, Year-on-year +30.17%.
On October 9, synthetic rubber prices continued to rise, which was the direct driver for these two curves to maintain the upward trend. In the raw material comparison table, natural rubber (Thailand 20#Mixed Standard Rubber, Shandong) reported 19,680 Yuan/ton on October 10, up 2.07% compared to October 8; SBR (Qilu 1502E, North China) reported 17,000 Yuan/ton, up 2.41%; BR (Qilu BR9000, North China) reported 16,700 Yuan/ton, up 1.83%; Carbon Black (N660, Shandong) reported 9,600 Yuan/ton, flat. Three of the four main materials rose, only carbon black stood firm.
Spot and futures markets moved in the same direction. On the futures market, rubber futures intraday price on October 12 was 19,800 Yuan/ton, rising 2.30% in a single day.
03
Inventory Continues to Drop, Channels Follow Suit
Price hikes did not lead to inventory build-up, but rather inventory reduction. In this period (October 2–October 8), Shandong tire sample enterprises saw a Month-on-month decline in finished product inventory.
As of October 8, radial tire sample enterprises averaged an inventory turnover of 36.95 days, decreasing 1.72 days Month-on-month and 7.71 days Year-on-year; all-steel tire sample enterprises averaged an inventory turnover of 26.16 days, decreasing 0.96 days Month-on-month and 13.71 days Year-on-year.
The two-digit year-on-year decline indicates two things: first, price hike letters are stimulating channels to place orders and stock up in advance; second, the factory shipment pace is better than before. Goods flowed from factories to dealer warehouses, not staying in the factory district.
04
Full Price Hike Period, Hikes Reached Terminals
This round is not quite like the previous ones. Previously, factories mostly shouted price hikes unilaterally, channels stood still, and terminal prices remained unchanged.
Channel follow-up actually started at the end of last month: On September 29, channel merchants in Jilin, Shandong, and Guangzhou issued letters successively, raising prices by 1%—5% from October 1, marking the first time channel merchants joined the price hike ranks.
This round of price hikes further spread to the terminal market, retail terminals began adjustments, manufacturer and dealer inventory decreased synchronously, and the market entered a full price hike period. For the first time, the manufacturer's cost pressure was shared by every link in the chain.
05
Three Variables to Watch for the Future Market:
First is the implementation rate for October and November schedules; having the letter written does not mean terminal transaction prices will follow suit;
Second is whether the cost index will continue to rise; once synthetic rubber loosens, the entire rhythm will change;
Third is the supply side of natural rubber; currently no signs of loosening are seen, and the 30% year-on-year raw material price increase is still being transmitted downstream.
Late October to early November is the observation window for whether this round of price hikes can truly land. For dealers, stocking pace and capital occupation must be calculated together—the most likely scenarios during the dense period of price hike letters are grabbing goods and pressuring inventory, followed by unable to meet demand.
Next, with raw material prices maintaining high levels and the November window approaching, tire price adjustments will continue, and prices and inventories at various links in the chain are also being re-evaluated synchronously.
