Weak rubber prices buoy tyre companies

Automotive Tyre Manufacturer's Association, an apex body of the major tyre companies in the country, is hopeful that domestic price of natural rubber would continue its declining trend. This is due to an improvement in production at the domestic as well as the global level.

RSS-4 grade prices are likely to fall to Rs 51-52 per kg soon,said D Ravindran, director general of the association.

Natural rubber production is set to improve in all major rubber producing countries leading to more arrival of stocks in the market, he said. Production is gathering momentum in Thailand, the largest producer of natural rubber in the world, he said.

Indications from Malaysia and Indonesia are also showing the same trend, he said. The peak season for rubber tapping in the domestic market would commence from September.

Meanwhile, consumption of natural rubber by the non-tyre sector in the country has slowed down due to the high prices, he said.

Faced with the problem of cheaper imports, the non-tyre sector is finding it hard to cope with the high prices of both rubber and petroleum products, he said.

In this scenario, the prices of RSS-4 grade are likely to continue their slide, he said.

Rubber prices have been showing a declining trend since August.

In July, prices hovered around Rs 68 per kg for RSS-4 grade rubber. But since then the prices have fallen sharply.

Today, RSS-4 grade at Kochi was quoted at Rs 55 per kg.

The closing price of RSS-4 at Kottayam, Kerala Tuesday was at 56.50 per kg, according to the Rubber Board.

Supply glut ails natural rubber trade

Steep fall in the prices of natural rubber continued here today, and RSS 4 grade lost 75 paise on a kg when it quoted Rs 55. Likewise non-graded sheet rubber was traded at Rs 50 and price tag of ISNR 20 was Rs 52.

As good seasonal production is on the anvil, there is a panic among the growers and hence, the supply is on the increase for the last couple of weeks. It is expected total production will be to the tune of 3,50,000 tonne during September-December, which is the peak season for rubber production.

In anticipation of an increase in supply, user industries, especially tyre producers, are very cautious in purchasing rubber , said traders here.

"Tyre companies are buying very limited quantity and will not take any step for the escalation of prices," a trader said.