AKRON—Tire prices are on the rise, due in large part to a combination of increased raw materials costs, higher shipping expenses and "changing market conditions."
Over the past few months, Tire Business has tracked as many as 20 tire-price increases from 10 major tire manufacturers, including multiple increases from all but three of them.
Goodyear, which issued tire price increases in December 2020 and April, noted in its fourth-quarter 2020 conference call in February that it expects raw materials costs to increase $125 million to $175 million during 2021, based on spot rates.
The tire maker said about two-thirds of raw materials costs are influenced by oil prices, and raw materials make up about 36 percent of the cost of goods sold (COGS). Goodyear said natural rubber and butadiene prices are above pre-COVID-19 levels, and carbon black prices have been rising steadily.
The U.S. Energy Information Administration recently raised 2021 forecasts for U.S. and global benchmark oil prices, pointing to the recent decision by major oil producers to extend existing supply cuts through April.
For the two most popularly traded oil grades, the EIA boosted its 2021 West Texas Intermediate crude price forecast by 14 percent to $57.24 a barrel; it expects 2022 prices to average $54.75. For Brent crude, the EIA also increased its forecast by 14 percent to $60.67 a barrel and next year's by 6 percent to $58.51.
Meanwhile, according to S&P Global, synthetic rubber prices increased in the fourth quarter of 2020, in line with stronger feedstock and natural rubber prices.
Asia's natural rubber market firmed up in late 2020 due to a labor shortage created by the coronavirus pandemic. In addition, heavy flooding in southeast Asia impacted production. Southeast Asia accounts for more than two-thirds of global NR supply.
The Association of Natural Rubber Producing Countries (ANRPC) had forecast a 4.9 percent drop in global natural rubber supply in 2020, compared with 2019.
Here is a run-down (listed alphabetically) of the North American tire price hikes announced over the last six months:
Apollo Tyres Ltd.
- Vredestein-brand products in the U.S. and Canada rose by up to 5 percent on March 1.
Bridgestone Americas Inc.
- Firestone-brand truck and bus tires in the U.S. and Canada to rise by up to 8 percent on May 1; increased by more than 5 percent to 8 percent on Nov. 1, 2020;
- Bridgestone-brand truck and bus radial tires and Bandag retreads in the U.S. and Canada rose by up to 8 percent on April 1;
- "Select" Bridgestone- and Firestone-brand passenger and light truck in the U.S. and Canada to rise by up to 8 percent, effective May 1; increased by an undisclosed amount Jan. 1.
Continental Tire the Americas L.L.C.
- Select Continental- and General-brand passenger and light truck tires in the U.S. by an undisclosed amount, effective March 1.
Goodyear
- Goodyear-, Kelly- and Dunlop-branded passenger tires by up to 8 percent in North America on April 1; Goodyear- and Dunlop-branded passenger and light truck tires in the U.S. rose by up to 5 percent on Dec. 1, 2020.
Hankook Tire America Corp.
- Commercial truck tires in the U.S. by 5 percent, effective May 1; by up to 5 percent in December 2020
Michelin North America Inc.
- Select Michelin, BFGoodrich and Uniroyal passenger and light truck tires in the U.S. and Canada rose by up to 8 percent on April 1; Michelin- and BFGoodrich-brand passenger and light truck tires in the U.S. by up to 5 percent on Feb. 1;
- Uniroyal-branded products by an undisclosed amount last November.
Pirelli Tire North America Inc.
- Car and light truck tires in the U.S. to rise by up to 7 percent on April 15; increased by an undisclosed amount on Jan. 1;
Sumitomo Rubber North America Inc.
- Falken- and Ohtsu-brand consumer tires rose by up to 8 percent, effective Jan. 1, and medium truck tires by up to 6 percent, effective Dec. 1, 2020, in the U.S. and Canada.
Toyo Tire U.S.A. Corp.
- Most consumer and commercial tires in the U.S. by up to 6 percent on May 1; similar price increase May 1 on "non-winter" passenger and light truck tires in Canada.
Yokohama Tire Corp.
- Yokohama passenger, light truck and medium truck tires in the U.S. to rise by an undisclosed amount on May 1; consumer replacement tires increased by up to 5 percent on Nov. 1, 2020; "select" commercial truck/bus tires by up to 6 percent on Dec. 1, 2020.
- Alliance-, Galaxy- and Primex-brand products in the U.S., Canada and Latin America rose by an undisclosed amounts, Jan. 1.
The last time Bridgestone announced a price increase on consumer tires was in September 2018; Toyo and Continental last raised prices in North America in 2019.
Early last year, Michelin North America Inc. increased prices on selected Michelin-, BFGoodrich- and Uniroyal-brand passenger and light truck tires by up to 7 percent in the U.S. and 5 percent in Canada; Goodyear raised prices on Goodyear- and Kelly-brand consumer tires by up to 5 percent; Sumitomo Rubber North America Inc. hiked prices on select Falken-brand tire lines by up to 5 percent; and Pirelli raised car and light truck tire prices in the U.S. by up to 5 percent.