The price of natural rubber is steadily declining due to many factors. Indian tyre companies are using this to their advantage by not dropping their prices.
China, the world’s largest rubber consumer, has suddenly decreased its demand Indian rubber. Crude oil prices have also lowered, consequentially taking down the price of synthetic rubber. Tyre makers are now more inclined to use more synthetic rubber in their tyres, decreasing the need for natural rubber even more.
These series of events took a toll on the market as India’s RSS grade-4 rubber prices fell by 20% just in the last two months.
Tyre makers are not dropping their prices, hence increasing their profit because of lower production cost. But the industry is still facing competition from Chinese tyres in the replacement market.
Almost one-third of all replacement tyres are imported from countries like China and are hitting the local tyre industry in spite of the recent developments.