Triple Squeeze: Rubber Industry in 2026

Since the beginning of 2026, China's rubber products and related upstream and downstream industrial chains have been experiencing unprecedented cost shocks. The prices of the three core raw materials—natural rubber, carbon black, and international crude oil—have risen simultaneously, creating a "triple squeeze" that continues to compress corporate profit margins. Driven by cost pressures, the entire industry has seen a wave of price increases, becoming a prominent phenomenon in the current manufacturing sector.

As the core raw material for rubber products, the price trend of natural rubber directly determines the industry's cost base. Since the beginning of 2026, natural rubber prices have continued to rise. Affected by the traditional off-season for rubber tapping, supply in major producing areas is tight, while downstream demand is gradually recovering, with both supply and demand driving prices upward.

Futures market data shows that in March, natural rubber prices broke through the high of 17,000 yuan per ton, and on February 24, it once rose to over 18,000 yuan per ton, setting a new peak.

In just over a month, the year-on-year increase has exceeded 10%, and the upward momentum has not yet weakened. As a typical commodity, the supply of natural rubber is significantly affected by climate and output control in major producing countries. Currently, the supply gap in major global producing regions is unlikely to be filled in the short term, providing strong support for high prices and increasing cost transmission pressure.

Carbon black, as a key reinforcing material in rubber products, is also experiencing price increases driven by raw material and energy costs, creating a second layer of pressure. Recently, Cabot, a major international carbon black manufacturer, issued two consecutive price increase notices in China this year, raising the price of rubber carbon black by 800 yuan/ton from March 1st and further increasing the price of specialty carbon black products by 1800 yuan/ton (including tax) from March 15th, mainly due to the continuous rise in production costs.

Data shows that since the Spring Festival, the price of raw material coal tar has risen sharply, with increases of 550-660 yuan/ton in major producing areas, directly driving up carbon black prices by nearly 1000 yuan. Despite facing oversupply in the carbon black industry in 2025, 2026 saw a surge in carbon black prices due to a combination of factors: concentrated capacity release, a recovery in demand from downstream rubber product industries, and rising raw material prices. This further burdened downstream industries.

The dramatic fluctuations and high levels of international oil prices added a third layer of pressure to the industry. Since the beginning of 2026, international oil prices have experienced frequent rollercoaster rides. Influenced by factors such as the escalating geopolitical conflict in the Middle East and OPEC+ maintaining production cuts, Brent crude oil prices surged to $88 per barrel. Domestic crude oil futures prices also fluctuated upwards, closing at 765.5 yuan per barrel on March 16, a significant increase from early February.

Oil prices not only directly affect the fuel costs of rubber product production, but more importantly, core raw materials such as synthetic rubber and carbon black are downstream products of petrochemicals. Rising oil prices drive up the prices of these raw materials, creating a chain reaction of "rising oil prices—rising raw material prices—rising costs."

Simultaneously, rising oil prices also increased logistics and transportation costs. Some shipping companies have opted to detour via the Cape of Good Hope due to blocked passage through the Strait of Hormuz, further exacerbating the cost pressures of raw material imports and finished product transportation.

This triple cost factor has placed the rubber products and related industries in a dilemma. Raw materials account for over 70% of rubber product production costs, and the simultaneous rise in the prices of the three core raw materials has led to a rigid increase in enterprise production costs. Although most companies have tried their best to offset the cost increases through internal optimization and cost reduction, they are still struggling to fully absorb the increase.

From an industry perspective, since March, leading companies such as Zhongce Rubber, Linglong Tire, and Fengshen Tire have successively issued price increase notices, with increases generally ranging from 2% to 5%. Smaller enterprises are also following suit, otherwise they will face the risk of losses or even production shutdowns.

Looking ahead, the natural rubber tapping off-season has not yet ended, uncertainties in the Middle East geopolitical situation remain, and carbon black raw material costs remain high. The triple squeeze is unlikely to ease significantly in the short term, and the upward trend in industry prices is likely to continue.

This round of industry-wide price adjustments was not a proactive price increase by enterprises, but rather a passive response driven by cost pressures, highlighting the structural vulnerability of the manufacturing sector to fluctuations in commodity prices.

Going forward, as supply in production areas gradually recovers and the geopolitical situation stabilizes, cost pressures are expected to ease gradually. However, in the short term, the industry will continue to face significant challenges under intense pressure.