On April 8, Qingdao tire company Senqilin officially announced the first round of price increases.
This is not because it cannot bear it alone, but because the entire tire industry is facing huge cost pressure.
A blockade order in the Strait of Hormuz pushed global crude oil prices to a high of US$100, with Brent spot prices soaring to US$146/barrel.
The fire ignited from the Persian Gulf followed the clear transmission chain of “crude oil → synthetic rubber/chemical raw materials → carbon black → tire manufacturing costs” and burned all the way to the workshop of the tire factory.
On February 27, 2026, the closing price of Brent crude oil was US$73.16/barrel. By April 6, this number became US$109.57/barrel, an increase of nearly 50% in just 40 days.
The Strait of Hormuz repeatedly opened and closed, tankers turned around, freight rates increased by 300%, and profits from naphtha cracking in Asia soared from US$108 per ton to more than US$400.
More than 70% of tire production costs are composed of three core raw materials: natural rubber, synthetic rubber, and carbon black.
Each of these three things has been accurately hit by the war in the Middle East.
The upstream of synthetic rubber is butadiene and styrene, and the source of these chemical raw materials is crude oil.
Every 10% increase in international crude oil prices will lead to an increase in synthetic rubber production costs, with the transmission cycle ranging from one week to half a month.
After the conflict in the Middle East broke out, the price of butadiene jumped first. Synthetic rubber manufacturers were forced to raise prices, and tire companies could only accept the orders.
The situation for carbon black is even more severe. Global chemical giants Cabot and Orion have successively announced price increases, with increases as high as 25%.
The mainstream quotation of carbon black N660 model increased by 2,000 yuan/ton from the beginning of the year, an increase of 12.5%.
The logic of carbon black price increases is similar to that of synthetic rubber: crude oil → ethylene tar → carbon black, each step is an “accelerator” of cost transmission.
Carbon black prices have already risen once in 2025, and will rise another 12.5% in 2026, squeezing the profits of tire factories in a superimposed manner.
Although natural rubber is not directly extracted from crude oil, it is equally closely related to the situation in the Middle East.
Among the main cost components of natural rubber, fuel costs account for as high as 30% to 40%. The surge in international oil prices directly pushes up the mechanical operation costs, transportation costs, and processing energy consumption costs of rubber plantations.
In the first quarter, the domestic natural rubber market experienced three stages: “supply tightening drive – geo-cost transmission – demand negative feedback”.
In the fourth quarter of 2025, natural rubber prices rose by 12% from the previous quarter, and by another 8% in the first quarter of 2026, hitting a three-year high.
Hujiao’s main force RU2605 once approached the 17,000 yuan/ton mark.
Rising raw material costs coupled with soaring fuel surcharges, the “passive price increase” of natural rubber is equally fierce.
The three core raw materials have risen simultaneously, and the cost defense lines of tire companies have been fully penetrated.
According to Zhuochuang Information monitoring, the comprehensive cost pressure of tire companies has reached a stage high.
Since March, more than 70 domestic tire companies have issued price increase notices, with the increases concentrated between 2% and 5%.
Sen Qilin adopted “two cards” to deal with the challenge.
The first card is a price increase.
Sen Qilin launched the first round of price increases after comprehensively considering various factors such as product cost, terminal demand, and brand positioning to minimize the impact of raw material price fluctuations.
Price increases are a collective “passive action” by the industry, but they are not the whole answer.
The second card is “active defense” for global production capacity layout.
Sentury’s “833Plus” strategy plans to build 8 digital tire intelligent manufacturing bases around the world (3 in China, 2 in Thailand, and 1 each in Europe, Africa, and North America).
At present, four bases have been built in Qingdao, China, Rayong, Thailand, and Tangier, Morocco.
The Moroccan base mainly targets the European and American high-end tire markets. Currently, the United States does not impose additional tariffs on tires originating in Thailand and Morocco.
This means that when China’s domestic tire exports face high tariff barriers, Sentury’s overseas factories can “detour” to enter the European and American markets.
This global layout is not the icing on the cake, but a “strategic buffer” at critical moments.
This round of cost impact is accelerating the elimination of the tire industry.
Every percentage point increase in raw material costs directly eats up net profits. Especially for economical tire products with a high proportion of synthetic rubber, the cost defense line has long been lost.
Small and medium-sized tire companies lack overseas production capacity layout, lack the ability to command brand premiums, have limited room for price increases, and profits are squeezed from both sides.
However, leading companies such as Senqilin, relying on their global layout, intelligent manufacturing efficiency advantages and brand premiums, may expand their market share in the industry reshuffle.
A wave of price increases is a “stress test” for the industry and a “screener” for leading companies.
For Sen Qilin, after the first round of price increases, there may be a second and third round.
As long as the war in the Middle East continues, this burning cost fire from the Persian Gulf to Shandong will not go out.
Those companies that cannot survive will fall, but those that survive will usher in a more concentrated market.
