The harvest season for natural rubber (NR) in Kerala, India was expected to encourage tyre companies to increase their purchases from local markets.
However, they are still not likely to raise purchases from the local market even as international NR prices have gone up a little higher than domestic prices after three years. This is due to the hit that their sales have taken amid the rising influx of Chinese tyres.
RSS-4 rubber consumed by the tyre industry was priced Rs117 per kg in the local market on November 7, while the equivalent grade of rubber in the international market stood at Rs118.38 per kg. On November 6, price in both markets stood at Rs116 per kg.
Block rubber prices in the international market touched Rs106 per kg, up Rs8 from a month ago. Tyre manufactures have been importing block rubber which,according to them, is of the same quality as the sheet rubber produced in India.
According to Rajiv Budhraja, director general of Automotive Tyre Manufacturers’ Association (ATMA), import of Chinese tyres in the last three years have gone up two-and-a-half times. This had a significant impact on the truck and bus segments where tyre makers get the bulk of their revenue. As a result, the ability of the tyre companies to purchase from the market is reduced, Budhraja said.
Tyre traders said that despite lower prices in the domestic market, tyre companies are still not buying.