Your Tire Prices Are Going Up – Thanks to Global Rubber Apocalypse
Like everything else, tire prices are going up. Why? With the advancements in third world nations and population growth in industrialized nations like China and India, the consumption of natural resources has increased at break-neck speed.
More people around the world own or drive cars than ever before and since cars require four tires (usually), it’s only natural to assume that all of the components to build said cars will have seen great demand.
Rubber is a critical raw material needed for car tires, personal protective equipment such as masks and gloves, and many more everyday products. Anytime you’re going anywhere, you’re using rubber. Now, supply chain disruptions have thrown the rubber industry into a tailspin.
“We could be on the cusp of a rubber apocalypse,” Ohio State University professor Katrina Cornish.
The global economy remains dependent on Asia for 90% of the natural rubber supply. For example, the U.S. imported $140 million worth of natural rubber in March 2021 alone, according to Census data.
The global natural rubber market was valued at nearly $40 billion in 2020, and demand for rubber is expected to increase. One analysis predicts the natural rubber market could be worth nearly $68.5 billion by 2026. One reason for the increased demand? Car tires.
“We are using tires more and more,” Stefano Savi, director of the Global Platform for Sustainable Natural Rubber. “The amount of mileage that we’re going to do as a global population is definitely bound to increase, and that’s why the demand for rubber is really continuing to increase.”
In August of 2021, a tire fire started in a storage area in Kuwait. The aerial footage is remarkable and shows just how many tires we are using as a species.
There have many more tire fires, especially in the USA. The impact of these fires on supply has not yet been calculated.
Tire Prices Are Going Up
Every so often, certain tire manufacturers tell us that tire prices are going up, but usually on certain models of tires, and not all of their tires. Tire prices are determined by many things, including where those particular tires are being produced. The increases are usually due to the unique challenges of producing certain tires in certain areas.
In this case, it’s because of a global rubber shortage. The picture had been coming to a head even before COVID as supplies were strained.
Add to this, the pandemic pause in production, the shipping issues as the world struggles to move so much backlogged cargo at ports and increased demand means only one thing: tire prices are going up.
A couple of months ago, I wrote an article about the prices of other car accessories going up due to supply issues of raw metals. The pandemic has played havoc with supplies.
Inflation has been gripping the USA since early 2021.
The Bureau of Labor Statistics (BLS) found that in June, consumer prices increased by 5.4 percent on an annualized basis. From May to June, consumer prices increased by 0.9 percent. In January 2021, before Joe Biden took over the presidency, annual inflation was at a stable 1.4 percent. While inflation has already hit American families hard, President Biden is pushing policies that would this problem even worse.
According to BLS, the cost of many goods and services have increased significantly over the past year:
- Gasoline has increased 45.1 percent in the past 12 months.
- Energy 24.5 percent in the past 12 months.
- Bacon has increased 8.4 percent in the past 12 months.
- Fresh fish and seafood have increased 6.4 percent in the past 12 months.
- Fresh whole milk increased 7.5 percent in the past 12 months.
- Fresh fruits increased 8.4 percent in the past 12 months.
- Major appliances increased 13.7 percent in the past 12 months.
- Furniture and bedding increased 8.6 percent in the past 12 months.
- Footwear increased 6.5 percent in the past 12 months.
- Airfares increased 24.6 percent in the past 12 months.
- Commodities have collectively increased 9 percent in the past 12 months.
Together, these influences suggest that car owners may want to layoff the big smoky burnouts for awhile – unless you have money to burn.