Rubber prices decline; sentimentally positive for tyre stocks
DSIJ Intelligence / 16 Mar 2017
The drop in rubber prices is sentimentally positive for the tyre stocks as natural rubber accounts for almost 45% of the raw material costs for tyre companies.
The domestic rubber prices have declined over 7% in the previous one month and is currently trading at Rs 150/kg.
Internationally the rubber prices have dipped by about 13-15% in previous one month. The international rubber prices are currently trading at Rs 160/kg.
The drop in rubber prices is sentimentally positive for the tyre stocks as natural rubber accounts for almost 45% of the raw material costs for tyre companies.
Such a decline is positive for tyre stocks viz., Apollo Tyres, Ceat, MRF and JK Tyres.
The tyre stocks were in focus even as China shifts its focus from Indian markets to US markets and decides to cut India trade. China raised the truck, bus and radial tyre prices for Indian markets by almost 10-15% making it little attractive in Indian markets.
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