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Korea’s three major tire makers — Hankook Tire, Kumho Tire and Nexen Tire — are feared to suffer sharp earnings declines in the second quarter, as the prolonged armed conflict in the Middle East has raised raw material and transportation costs by a huge margin.

The surge in raw material prices — driven by higher crude oil costs — comes as a particular concern for the tire makers. For instance, the naphtha price hike is highly likely to push up the cost of butadiene — a critical feedstock for synthetic rubber used for tires. Prices for other essential materials, including carbon black and natural rubber, are also expected to rise…

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