|
| Synthetic rubber fails to cash in on price fall |
| George Joseph / Kochi Mar 31, 2009, 21:44 IST |
|
Although the prices of synthetic rubber (SR) touched a low during the last calendar year, thanks to a steep fall in crude oil rates, the Indian tyre manufacturing sector has not witnessed a a major shift towards SR from natural rubber (NR), according to the latest consumption estimates of Automotive Tyre Manufacturers Association (ATMA), the representative body of the country's automotive tyre industry.
The estimates for the first three quarters of the current financial year indicate that the ratio of consumption of the two types of rubber has changed marginally in favour of NR at 73:27.
Despite a fall in SR prices during the nine months, the industry stayed away from the market because NR also had fallen during this period following a demand slump triggered by low automobile sales in the country.
A LOWDOWN ON LATEX
Consumption of NR and SR by Indian tyre industry: |
| Year (Apr-Dec) |
NR |
SR |
Ratio |
| 2007-08 |
366,059 |
142,926 |
72:28 |
| 2008-09 |
379,481 |
140,482 |
73:27 |
Of late, naphtha prices have recovered 35 per cent. Synthetic rubber is produced from styrene and butadiene, which are produced from naphtha. The resultant rise in the prices of synthetic rubber led to an increase in prices of natural rubber.
According to Rubber Board's estimates, the total SR consumption by Indian rubber-based industry slipped marginally to 220,000 tonnes in the April–December period from 222,860 tonnes last year.
According to the ATMA data, the tyre industry consumed 140,482 tonnes of SR in the nine-month period against a consumption of 379,481 tonnes of NR. In the same period last year, 142, 926 tonnes of SR were used against 366,059 tonnes of NR.
During 2007-08, 191,505 tonnes of SR were consumed against 495,577 tonnes of NR by the tyre production segment. This indicates the static nature in the consumption ratio of NR and SR.
In India, NR is the main component for production of truck tyres, while SR is used more in the manufacturing of car tyres. This also reflected in the local production of SR as 8.7 per cent drop is recorded during the April-December period of 2008-09.
The total production was 72,133 tonnes in the April–December period against 79,059 tonnes in the same period of 2007-08.
However, the volume of SR import rose to 154,300 tonnes against 143,825 tonnes in the nine-month period of 2007-08.
There would not be a major change in the NR and SR consumption pattern though there is sharp increase in the prices of NR in recent weeks, said a top official of ATMA.
In the pricing of NR, there has been a bouncing back of almost 40 per cent after touching the lowest level of Rs 60 per kg.
Recently, the price of SR has also increased, but this is 20-25 per cent only. It is the technical component of production that decides a sharp change in the consumption pattern of SR and NR, but this is not possible as of now.
The impact of the economic recession is also a major cause in this as in April–December period NR production increased by 9 per cent to 676,005 tonnes, while consumption edged up only by 3 per cent at 661,955 tonnes.
So the slow down in demand affected the consumption of rubber.
This was a major reason behind the marginal growth in the usage of SR even though the prices had dropped sharply. In India, the consumption ratio of SR and NR is almost static for the last few years. The country is a major producer of NR and hence the availability is rather high.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
