Vehicle sales in China jumped 32 percent to 18.1 million units in 2010, fueling demand for tires. Production in China, which relies on imports for 70 percent of its rubber needs, was disrupted by severe weather in its major producing provinces last year, according to the report.

Natural rubber traded in Shanghai topped 41,200 yuan a ton on Jan. 24 after more than doubling in the past year. Rubber accounts for more than 50 percent of a tire's production cost.

"Although tire-makers are considering raising their product prices, they have limited scope to pass on the gains in the raw material," Wang Zejun, an analyst with Huarong, said in the report.

China's natural rubber demand has grown by 10 percent annually in recent years, the report said. The world largest consumer of natural rubber may use 3.6 million tons this year, an increase of 9 percent, according to the Association of Natural Rubber Producing Countries. Natural rubber imports may rise 6.3 percent to 1.85 million tons, the group predicted.

Deliverable stockpiles of rubber at warehouses of the Shanghai Futures Exchange were 65,532 tons last week, less than half the level of a year ago, according to data compiled by Bloomberg.