S. Korea’s tire makers to raise prices due to increasing cost of rubber

South Korea’s three leading tire makers are set to raise commercial and passenger vehicle tire prices due to growing demand from automakers and increasing costs of raw materials, including natural rubber.

Hankook Tire & Technology Co. and Kumho Tire Co., South Korea’s two largest tire manufacturers, plan to raise the price of replacement tires sold in Germany by 3-5 percent in July.

The two tiremakers have raised prices in South Korea and the US earlier this year.

Nexen Tire Corp., South Korea’s third-largest tire maker, has raised prices in South Korea, the US, and Europe by 3 to 8 percent in the past couple of months.

The three South Korean tire manufacturers could soon raise prices again, depending on market dynamics.

Other global tire manufacturers have been hiking tire prices since early this year.

French tire maker Michelin, the US-basedGoodyear Tire & Rubber Co., and Japan's Bridgestone Corp. have all raised prices by up to 14 percent in the past couple of months.

Germany’s Continental Tire and India’s Apollo Tyres are expected to follow suit.

Analysts said the steep rise in rubber prices is compelling tire makers to increase prices even as they expect a rebound in demand amid signs of improving global economic conditions.

Natural rubber prices have been rising from the end of 2020 owing to tight supply and rising demand.

Industry watchers partly attributed the increase in rubber prices to the surge in protective glove demand caused by the COVID-19 crisis.

Tokyo rubber futures on Japan’s Osaka Exchange finished at 260 yen per kilogram on May 26, up 90% from 137 yen in May 2020.