Tyre stocks fall on account of rise in international rubber prices

Tyre stocks witnessed a slip in Wednesday’s intra-day trade on the back of a surge in international rubber prices. The rubber price per 100 kg, Bangkok, as on August 9, increased almost 2%. The rubber price per 100 kg, Kaula Lumpur, also rose on Wednesday. The SMR-20 increased 1.25% and latex (60% DRC) also rose 2.35%.
 
Among other tyre stocks, CEAT traded lower by 3.55% at Rs 1,703 per share, Apollo Tyres trading down by 1.81% at Rs 274 per share, J K Tyre and Industries dropped by 2.11% at Rs 157 per share, and MRF was down by 0.85% at Rs 66,151 per share.
 
At 1047 hours, the BSE Auto index was trading down by 0.30% at the 24,657 levels. Tata Motors and MRF were contributing majorly to index losses and dragging it further to lower levels. Tata Motors was trading down by 1.51% at Rs 423 per share while TVS Motor traded in the positive, up by 0.60% at Rs 599 per share.  
 
Meanwhile, the Directorate General of Anti-Dumping and Allied Duties (DGAA) has recommended imposition of anti-dumping duty of USD 245-452 per MT (Rs 15,476-28,552) on truck and bus radial tyres (TBRs) imported/produced from China in order to minimise the threat of market share loss in domestically produced radial tyres. 
 
There is fear that surplus Chinese capacities coupled with its government incentives could be utilised for flooding the Indian market with Chinese-made TBRs. Even an incremental 1% diversion of Chinese tyre exports could have a significant impact on both pricing and market share.