China's Tyre Exports at a Turning Point: The 2026 "Volume–Price Shift" and a Crossroads for Exporters
China's tyre export market is shifting from "volume growth at falling prices" to outright declines in both volume and value. Export volume rose 4.9% year on year in H1 2026 while export value fell 1%; in July, both metrics contracted by double digits. With definitive EU anti-dumping duties now in force, a US Section 201 investigation on the horizon, and raw-material costs at multi-year highs, the traditional export model built on low prices and origin arbitrage is losing ground. The industry has reached a turning point.
Market conditions: from "volume up, price down" to a July contraction in both
In H1 2026, China exported 4.94 million tonnes of rubber tyres, up 4.9% year on year, with export value of RMB 82.6 billion, down 1% — a textbook case of "volume up, price down." July marked a clear inflection: monthly exports fell to 820,000 tonnes (−10.1% y/y), with export value of RMB 13.7 billion (−13.1% y/y), both declining by double digits. On a cumulative basis, January–July exports reached 5.76 million tonnes (+2.4%), while value fell 3.0% to RMB 96.3 billion. Momentum has weakened month by month.
Threefold pressure: trade barriers, costs and demand
Trade barriers are escalating from bilateral duties toward a "global encirclement." The EU imposed definitive anti-dumping duties of 4.3%–45.3% on Chinese passenger-car and light-truck tyres (effective 8 July, valid for five years); its countervailing-duty determination is expected on 5 December. H1 exports of auto tyres from Shandong province to the EU fell 43.9%. In the United States, passenger-car tyres face a 25% Section 232 tariff on top of 25% Section 301 duties and the 12.5% "forced labor" Section 301 duty — a combined effective rate of roughly 41.5% or more, with some categories exceeding 100%. US imports of Chinese tyres fell 28% y/y in the first seven months of 2026, versus a 3.9% decline in total US tyre imports — China's share is contracting far faster than the market itself. More consequential still, on 14 September the United Steelworkers petitioned for a global Section 201 safeguard investigation covering all tyre categories, explicitly naming 17 plants that Chinese companies have built in seven countries (Cambodia, Indonesia, Malaysia, Morocco, Serbia, Thailand and Vietnam). If the case is opened, the "move production offshore" route to the US market would be systematically closed.
Raw-material costs are rising across the board. From January to May, natural rubber futures climbed about 13%, butadiene rubber about 28%, and carbon black about 21%; in June, natural rubber briefly exceeded RMB 18,000/tonne, a three-year high. Raw materials account for over 70% of production costs, and industry estimates suggest the three core materials alone added roughly 12% to unit costs, with theoretical TBR costs at one point exceeding RMB 970 per tyre. Since March, more than 80 companies have issued price-increase notices, some in two to three rounds. Yet high channel inventories and weak end demand have created a standoff: factories raise prices, while dealers struggle to pass them through.
Demand is diverging; emerging markets are the only growth engine. In the first four months, PCR tyre exports to Latin America, Africa and Asia (ex-West Asia) grew 40.3%, 38.2% and 33.4% respectively, while traditional US and EU markets kept contracting. Container freight rates were up more than 43% from the start of the year, and RMB appreciation has generated FX losses — squeezing exporter margins from every side.
Industry divergence: overseas capacity is the dividing line
H1 2026 results tell the story of "revenue growth without profit growth," yet companies diverged sharply.
The common thread among profit growers is overseas capacity and cost pass-through ability. The structural takeaway is clear: the resilience of the "Made in China + export" model now trails the "global capacity + multi-market" model.
Future trends: four certain directions
First, the export center of gravity is shifting to emerging markets. Second, overseas capacity is moving from "origin shifting" to "local deepening": by end-2025, more than 20 Chinese companies had built 30+ production bases across 15 countries, with new plants in Vietnam, Cambodia and Malaysia still coming onstream in 2026. Third, new-energy vehicles (NEVs) are a structural growth driver: China exported 3.26 million vehicles in January–April 2026 (+51% y/y), including 1.47 million NEVs (+69% y/y). NEV tyres wear faster — replacement cycles of 30,000–50,000 km versus 60,000–80,000 km for ICE vehicles — sustaining demand for low-rolling-resistance, low-noise specialist tyres and pushing product lines toward NEV-specific and higher-value specifications. Fourth, industry concentration is rising and brand/channel value is being repriced: research suggests Chinese brands hold only about 16% of overseas markets, leaving substantial headroom.
Transformation roadmap: stop the bleeding, shift gear, rebuild
The six levers in detail:
Market rebalancing (stop the bleeding) — shift order focus toward Latin America, Africa, Southeast Asia and the Middle East, and account freight and tariff costs market by market.
Compliance and origin planning (shift gear) — complete a tariff self-review before the 5 December EU countervailing-duty ruling; for the US market, stop treating "build a plant abroad" as a universal fix and assess Section 201 risk, local rules of origin and customer certification cycles.
Product upgrade (shift gear) — migrate to NEV-specific tyres and higher-value, differentiated specifications to exit the low-end price war.
Cost and FX management (stop the bleeding) — hedge natural and synthetic rubber, lock in long-term supply contracts, and adopt FX-inclusive pricing to limit exchange losses.
Brand and channel building (rebuild) — evolve from OEM/white-label exports to own brands, regional distribution and platform direct sourcing.
Green compliance (rebuild) — get ahead on EUDR, tyre-labelling and recycling requirements, turning compliance into a ticket to high-value markets.
Scenarios and monitoring: watch the Section 201 case
The Section 201 outcome is the pivotal variable. If the case is opened and covers overseas plants: halt new "avoidance" capacity, pivot to local deepening (local teams, local sourcing, local brands) and prioritize non-US markets. If opened with moderate duties: keep existing capacity and accelerate diversification into third countries such as Morocco and the Middle East. If not opened: the current offshore route can continue, with origin and pricing optimized around the EU/US duty structure.
Monthly monitoring should cover: customs export volume and value; the 5 December EU countervailing-duty ruling; the USTR decision on Section 201; whether natural rubber holds above RMB 18,000/tonne; freight indices; and enforcement of new US origin-tracing rules.
Bottom line
2026 is a transition year from "scale dividends" to "structural dividends" for China's tyre exports. The traditional export model of low prices and origin arbitrage is entering a downturn. Over the next one to two years, companies with localized overseas capacity, higher-value product lines and brand equity will capture the consolidation dividend — while single-market, single-model exporters face a narrowing window to transform.
