AKRON—Escalating raw material costs continue to trigger price increases in the tire industry—this time affecting prices on consumer tires, farm tires and tread rubber. Goodyear, Bridgestone/Firestone Inc., Michelin North America Inc., Continental General Tire Inc., Yokohama Tire Corp. and Pirelli Tire North America are raising prices on passenger and light truck tires this spring.
Goodyear will increase prices on all its Goodyear, Dunlop and Kelly consumer lines by 3 to 5 percent, while prices for all Goodyear and Kelly farm tires will jump 4 to 5 percent.
The Akron-based tire maker also will institute price hikes of 2.5 to 5 percent for its Goodyear and Ultima retreads, as well as on tread rubber. All of the company's price increases are effective April 17.
Michelin Americas Small Tires will boost prices by up to 5 percent June 5 on all Michelin, BFGoodrich and Uniroyal lines, as well as on private and associate brands.
BFS will raise prices by up to 4 percent June 1 on all Bridgestone, Firestone, Dayton and associate brand passenger and light truck tires. Specific product line increases will be issued no later than May 10, the company said.
Conti General activated a 3-percent price increase on all Continental, General and private brand products April 1.
Process oil costs are increasing almost every quarter, and the prices of synthetic rubber, carbon black, chemicals and reinforcements also are rising with crude oil prices, said Thomas Bruning, Conti General's director of passenger/light truck replacement tires.
"The same forces that keep driving up gasoline prices compel us to make this adjustment," Mr. Bruning said in a prepared statement.
Yokohama will institute price hikes of up to 3 percent on its passenger and light truck tires effective May 1, said Dan King, director of marketing and corporate sales for consumer products. The Fullerton, Calif.-based tire maker still is determining which lines will receive the price increases.
"I think everybody's in the same boat," Mr. King said. "The industry has been increasing costs on a manufacturing level, but has not really taken that as a price increase out in the marketplace.
"Now it seems like an opportunity to say, `Hey, the costs have escalated so much over the last few years, and we've held pricing down as much as possible.' It's to the point where it needs to happen, I think."
Pirelli will raise prices April 15 by an average of 3 percent, but up to 5 percent on some lines, a spokesman said.
Toyo Tire (U.S.A.) Corp. has not determined a price hike yet, but the company will "more than likely" increase passenger and light truck tire prices in June, said Earl Knoper, senior vice president of marketing.
Other tire makers—including Hankook Tire America Corp. and Kumho USA Inc. revealed no imminent plans to raise consumer tire prices, but acknowledged they would follow the tire industry leaders.
In the agricultural tire market, Titan International Inc. will boost its prices 5 percent April 15. Conti General already raised its ag tire prices 2 percent Jan. 1. However, neither BFS nor Michelin have committed to price hikes for their farm tires.
In retreading, Bandag Inc. increased its tread rubber prices 3.5 percent on April 1. In an effort to give dealers time to adjust to the increase, Bandag said it will issue them a credit equal to the increase for 10 percent of their tread rubber purchases over the last 12 months.
Michelin, Oliver Rubber Co. and Hercules Tire & Rubber Co. said they have no immediate plans to raise tread rubber prices.
In January, the Big 3 tire makers increased prices on radial commercial light truck tires. Michelin also raised prices on some recreational vehicle tires while lowering prices on others.
The latest round of price increases announced by the tire manufacturers were "in the pipeline," given that raw material costs are up 3 percent from last year, said Michael Sison, an analyst with McDonald & Investments Inc. in Cleveland.
Crude oil prices ranged from $22 to $26 per barrel the week of April 3, according to the Wall Street Journal. A year ago, crude oil prices averaged about $16 per barrel.
Although OPEC has agreed to boost oil production by nearly an additional 1 million barrels, Mr. Sison said he believes raw material prices will continue to inch up and that tire prices will follow that trend.
"My sense is that raw material prices for tires will probably continue to creep up," he said. "I think the price increases will stick in light of that."
Mr. Sison said demand for tires and cars remains strong, and tire dealers shouldn't worry about being able to pass the increases on to consumers.
Saul Rubin, an analyst with Warburg Dillon Read L.L.C., noted that tire prices are up in Europe and other parts of the world, so the latest announcements are not just a U.S. trend.
Petroleum-based synthetic rubber prices are all higher than a year ago. Prices for styrene are about 40 cents per pound, approximately 16 cents higher than in 1999, according to Robert Harvan, manager of market analysis consulting with Honeywell Hi-Spec Solutions.
Butadiene prices are about 21 cents per pound, 5 cents higher than last year.
Mr. Harvan said high petrochemical prices are resulting from a convergence of high oil prices and petrochemical producers shutting down for annual maintenance and cleaning during the first quarter.
Crain News Serviceer Justin Boyd contributed to this story.