Technically specified natural rubber (TSR20), the grade most tire compounds are built on, averaged $2.41/kg in September 2026, 38.5% above the $1.74/kg of September 2025, according to the World Bank's monthly price series. Over the same twelve months the US producer price index for tire manufacturing rose 0.7%, from 221.8 to 223.3. Rubber has repriced; tires, so far, have not.
That gap is the most important number in the tire cost chain this autumn. It means the margin cushion tire makers built in 2022 and 2023, when tire prices rose and rubber eased, is now being spent. With the Association of Natural Rubber Producing Countries (ANRPC) raising its projected 2026 supply shortfall to 317,000 tonnes and Brent crude averaging $116.8 per barrel in September, both natural and oil-based rubber inputs point the same way. The question for buyers is not whether tire prices follow, but when, and through which contracts.
TSR20 has climbed 38.5% in twelve months, and the grade spread has narrowed
The World Bank's Pink Sheet tracks two Singapore (SICOM) nearby contracts: TSR20, the block rubber used mainly in tires, and RSS3, ribbed smoked sheet. TSR20 was flat through the end of 2025, between $1.71 and $1.74/kg from August to December. It then rose in eight of the next nine months, reaching $2.25/kg in June 2026, dipping to $2.14 in July and closing the third quarter at $2.41 in September.
On a quarterly basis the move is just as clear. TSR20 averaged $1.71/kg in the third quarter of 2025 and $2.27/kg in the third quarter of 2026, a rise of 32.4%. For historical context, the same series averaged $2.35/kg in the third quarter of 2013, so the September 2026 monthly figure is already above that level, while the 2026 quarterly average is 3.4% below it.
RSS3 rose less, 30.3% year on year to $2.75/kg. The RSS3 premium over TSR20 shrank from $0.64/kg in July 2026 to $0.34/kg in September, which tells buyers the latest leg of the rally is concentrated in the tire grade, not in sheet rubber used for specialty products.
| Month | TSR20 ($/kg) | RSS3 ($/kg) | Brent ($/bbl) | US tire PPI (Jun 1981=100) |
|---|---|---|---|---|
| Sep 2025 | 1.74 | 2.11 | 68.0 | 221.8 |
| Dec 2025 | 1.74 | 2.06 | 62.7 | 222.5 |
| Mar 2026 | 1.95 | 2.39 | 103.7 | 223.5 |
| Jun 2026 | 2.25 | 2.86 | 85.4 | 223.8 |
| Aug 2026 | 2.24 | 2.73 | 90.9 | 226.3 |
| Sep 2026 | 2.41 | 2.75 | 116.8 | 223.3 |
| Change, Sep 2025 to Sep 2026 | +38.5% | +30.3% | +71.8% | +0.7% |
US tire producer prices moved 0.7%, and fell 1.3% in September alone
The BLS index for tire manufacturing (excluding retreading) measures what US tire plants receive for their output. It drifted from 221.8 in September 2025 to a high of 226.5 in July 2026, then slipped to 226.3 in August and 223.3 in September, a 1.3% monthly drop. Measured August to August, when TSR20 was up 31.0%, the index was up 1.8%.
The disconnect is not new, but it has flipped direction. Between 2019 and 2023 the annual average of the index rose 29.2%, from 169.5 to 219.0, while TSR20 fell 10.4% from 2022 to 2023, to $1.38/kg. Tire makers held most of that pricing as rubber eased. Since 2023 the pattern has inverted: TSR20's January to September 2026 average of $2.12/kg is 53% above its 2023 average, while the tire index's 2026 average to September is only 2.7% higher than in 2023.
For readers tracking the North American replacement segment, the North America passenger car tires market is a segment where replacement list prices, rather than indexed formulas, set the pace of pass-through.
ANRPC's 2026 deficit forecast quadrupled in one month, to 317,000 tonnes
Price is following fundamentals. ANRPC's monthly statistical reports have published a running forecast for 2026 world supply and demand all year. In its January report, released on 2 March 2026, it projected production of 15.324 million tonnes against consumption of 15.602 million tonnes, a gap of 278,000 tonnes. Successive reports trimmed demand faster than supply, and by the July report (31 August) the gap had narrowed to 77,000 tonnes.
The August report, released on 30 September 2026, reversed that. ANRPC cut its 2026 production forecast to 15.039 million tonnes, up only 0.6% on a revised 14.952 million tonnes for 2025, citing revisions for Thailand, Malaysia and Indonesia. Consumption stayed at 15.356 million tonnes. The resulting shortfall of 317,000 tonnes is about four times the July estimate. Across the year, the production forecast has been cut by 285,000 tonnes and the consumption forecast by 246,000 tonnes.
The monthly output data explain the cut. ANRPC estimated world production at 772,000 tonnes in April (down 2.59% year on year), 997,000 tonnes in May (down 4.7%), 1.207 million tonnes in June (down 3.7%), 1.321 million tonnes in July (down 5.15%) and 1.396 million tonnes in August (down 4.51%). Five straight months of lower year-on-year output, April to August, is not a weather blip a buyer can wait out. ANRPC's revised figures also imply 2025 itself ran a deficit of about 349,000 tonnes, so 2026 would be a second consecutive shortfall year.
Physical prices in producing countries confirm the futures signal. ANRPC reported Bangkok STR-20 at $2.39/kg and Kuala Lumpur SMR-20 at $2.31/kg for August 2026, with the SGX November contract averaging $2.24/kg. Our natural rubber market coverage tracks the producer-country supply base behind these grades.
Oil adds a second cost leg: Brent averaged $116.8 in September, 71.8% above a year earlier
A tire is not only natural rubber. Styrene-butadiene and polybutadiene rubber, carbon black and many process oils are derived from petroleum and petrochemical streams, so crude prices feed the other half of the compound bill. The World Bank's Brent series averaged $68.0/bbl in September 2025. It jumped to $103.7 in March 2026, peaked at $120.4 in April, fell back to $83.4 in July and rose again to $116.8 in September.
The usual hedge, substituting synthetic for natural rubber when one is expensive, is weak when both legs rise together. In September 2026 both were near their highs of the past year at the same time. Buyers of synthetic grades should read the synthetic rubber market alongside the natural rubber data rather than treating it as an escape valve.
Tire makers entered the squeeze with margin, and contract lags delay the pass-through
Large tire makers are absorbing this from a position of strength. Bridgestone reported first-half 2026 revenue of ¥2,321.7 billion, up 9.7%, and adjusted operating profit of ¥280.9 billion, up 19.7%, for an adjusted operating margin of 12.1% against 11.1% a year earlier. Its unchanged full-year forecast of ¥515.0 billion on revenue of ¥4,500.0 billion implies a second-half margin of about 10.7%, below the first half.
Michelin's nine-month release on 21 October 2026 shows the mechanism. Sales of €19,175 million were down 0.5%. Price effects subtracted €97 million because indexed contracts passed lower 2025 raw material costs back to customers in the first half; mix added €303 million. The company said the price effect turned positive again in the third quarter. Indexed contracts work in both directions, so the rubber costs of mid-2026 will feed contract prices with a delay.
A simple sensitivity shows the scale. TSR20 is $0.67/kg higher than a year ago. The table applies that change to different amounts of natural rubber content; the amounts are illustrative, not product specifications.
| Natural rubber content (illustrative) | Added cost at +$0.67/kg |
|---|---|
| 2 kg | $1.34 |
| 9 kg | $6.03 |
| 50 kg | $33.50 |
Products with high natural rubber content, such as truck, bus and off-the-road tires, carry the largest absolute exposure per unit.
What the gap means for tire makers, rubber buyers, distributors, OEMs and investors
Tire makers face a choice between list-price increases into a soft US index and accepting margin erosion. Bridgestone's implied second-half margin of 10.7% against 12.1% in the first half shows that guidance already assumes some compression. Makers with large indexed OE and fleet books will recover cost by formula, with a lag; those relying on replacement list prices have to announce increases.
Natural rubber buyers should treat the ANRPC revision as a supply signal, not noise. A 317,000-tonne projected deficit on top of an estimated 349,000-tonne shortfall in 2025 argues for longer coverage on TSR20 and for watching the RSS3 premium, which at $0.34/kg is back near the $0.29 to $0.33/kg range of late 2025 and early 2026.
Distributors and dealers should expect manufacturer price notices before the index moves. The US tire index fell 1.3% in September; if rubber stays near current levels, the cost of replacing inventory is more likely to rise than fall in 2027.
Vehicle makers on indexed tire contracts are likely to see the 2026 rubber rally in their 2027 pricing, mirroring the way Michelin's customers benefited from lower 2025 costs in early 2026.
Investors should separate first-half 2026 earnings, which reflect cheaper 2025 inputs, from the cost base now in inventory. TSR20 averaged $2.27/kg in the third quarter of 2026 against $1.71 a year earlier; that difference has not yet reached reported tire margins.
Methodology and sources
Rubber and crude prices are monthly, quarterly and annual averages from the World Bank Commodity Price Data (Pink Sheet). TSR20 and RSS3 are SICOM nearby contracts in US dollars per kilogram; Brent is in US dollars per barrel. Tire prices are the US Bureau of Labor Statistics producer price index for tire manufacturing, except retreading (series PCU326211326211, June 1981 = 100, not seasonally adjusted). Percentage changes are calculated from the published figures; the 2026 TSR20 average is the mean of the three 2026 quarterly averages. Deficits are ANRPC forecast consumption minus forecast production.
- World Bank Pink Sheet, October 2026 (2 October 2026): TSR20, RSS3 and Brent, July to September 2026, quarterly averages for 2025 and 2026, annual averages 2023 to 2025.
- World Bank Pink Sheet, July 2026, June 2026 and April 2026: monthly prices, January to June 2026.
- World Bank Pink Sheet, January 2026 and October 2025: monthly prices, July to December 2025, and the 2022 annual average.
- World Bank Pink Sheet, January 2014: TSR20 third-quarter 2013 average.
- US Bureau of Labor Statistics PPI, tire manufacturing, via FRED (updated 15 October 2026): monthly index, January 2019 to September 2026.
- ANRPC Monthly NR Statistical Reports: August 2026 (30 September 2026), July 2026, June 2026, May 2026, April 2026 and January 2026: 2026 production and consumption forecasts, monthly output estimates, physical and futures prices.
- Bridgestone, consolidated results for the first half of FY2026 (7 August 2026): revenue, adjusted operating profit and full-year forecast.
- Michelin, financial information at 30 September 2026 (21 October 2026): nine-month sales, price and mix effects.
Frequently Asked Questions
TSR20 averaged $2.41/kg in September 2026, 38.5% above the $1.74/kg of September 2025. RSS3 rose 30.3% to $2.75/kg over the same period.
Not yet: the BLS tire manufacturing producer price index rose 0.7% between September 2025 and September 2026, and fell 1.3% in September alone.
ANRPC's August 2026 report projects a 317,000-tonne deficit, with production of 15.039 million tonnes against consumption of 15.356 million tonnes. That is about four times the 77,000 tonnes it projected one month earlier.
Indexed contracts reprice with a lag: Michelin's price effect was minus 97 million euros over nine months because lower 2025 raw material costs flowed through in the first half, before turning positive in the third quarter.
Less than usual, because Brent crude, the feedstock base for synthetic rubber, averaged $116.8 per barrel in September 2026, 71.8% above a year earlier.
Bridgestone's adjusted operating margin was 12.1% in the first half of 2026, and its unchanged full-year forecast implies about 10.7% in the second half.