(Yicai) April 17 -- Several tire manufacturers have announced they will raise their prices in China, mainly driven by rising raw material costs, after a round of price increases last month.

Bridgestone will raise prices of passenger car tires in China by 3 percent to 5 percent from May 1, the Japanese multinational tire and rubber manufacturer announced on April 14. The following day, its Chinese peers Zhongce Rubber, Sailun Tire, and Wanli Tire said they will increase prices of various products, including all-steel heavy-duty tires, light truck tires, and inner tubes, by 1 percent to 5 percent.

Earlier, three other Chinese tire makers -- Timsun Rubber Tire Weihai, Bayi Rubber, and Keerun Tire -- announced price increases of 2 percent to 10 percent across their product lines.

All the companies attributed the price hikes to the comprehensive rise in raw material costs. Bridgestone said that the complex and volatile international situation, along with fluctuations in the commodity market, has driven up the prices of tire raw materials.

"Since April, the prices of tire raw materials have remained at elevated levels," said Wanli Tire. "Factors such as geopolitical conflicts in the Middle East, the cessation of rubber tapping in Southeast Asia's major production areas, and the complex changes in the global market have significantly increased the prices of tire raw materials, with production costs far exceeding expectations."

Raw materials account for over 70 percent of tire production costs, with natural rubber, synthetic rubber, and carbon black making up more than 60 percent, said Guo Juan, analyst at Sublime China Information. As prices of these key raw materials have entered an upward trend, and steel wire, energy, and logistics costs have increased since March, tire production has become much more costly, she noted.

High temperatures and droughts have slowed the tapping process for natural rubber, leading to raw material prices in China’s Yunnan and Hainan provinces reaching nearly a five-year high, said Di Yilin, analyst at Everbright Futures. Meanwhile, prices of Thai latex and cup latex have also hit their highest in nearly six years.

Synthetic rubber prices are highly correlated with international crude oil prices, which have surged due to the situation in the Middle East, Di noted. Moreover, a tight supply of butadiene has further driven costs, with the average monthly prices for styrene-butadiene rubber and polybutadiene rubber up over 20 percent in March from a year earlier, he added.

Carbon black accounts for about 20 percent to 25 percent of tire production costs, and due to the impact of the Middle East crisis, coal tar prices have risen more than expected, driving up carbon black quotations, according to Di.

This round of price increases is still insufficient to offset the rise in costs, as except for Timsun Rubber Tire, which hiked prices by 10 percent, the other companies only raised them by 1 percent to 5 percent.

According to SCI, the average production cost of all-steel tires exceeded CNY970 (USD142) per tire in March, up nearly 7 percent from January. Both Sailun and Wanli Tire have indicated that they do not rule out the possibility of further price adjustments in the future.

Editor: Futura Costaglione