The main reason for this is the shortage of natural rubber, which is a key component in the production of automotive tires. The media wrote about this trend emerging in the market several months ago. Rubber trees have been massively affected by a deadly disease, causing production disruptions. This state of affairs has already led to an increase in production costs: on average, the costs of producing natural rubber in the first half of 2021 increased by 57% compared to the same period last year.
What about the analogue? Synthetic rubber has also become more expensive to produce, and even more noticeably – by 66%! In this case, the prerequisite was the rise in oil prices.
In addition, the rise in electricity prices by 154% over the year and an increase in freight costs by 200% for container shipping played against tire manufacturers.
Thus, a significant increase in prices throughout the entire tire production chain and supply chain has already occurred. And to avoid a crisis, manufacturers took an extreme measure – they reduced their margins. However, experts predict that in the second half of the year, tires will already cost much more.
