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OEM Update

As auto industry recovers, rubber price goes up

July 15, 2009 11:12 am

With the auto industry showing signs of recovery, the demand for rubber by tyre companies has increased. Along with tight supplies, this has led to a 37 per cent increase in rubber price over the past month to over Rs 100 per kg. Tyre companies have also stepped up rubber imports with local prices quoting at a premium to international prices.
 
According to George Valy, President, Indian Rubber Dealers Federation, “Earlier, due to low demand tyre companies were not keeping much of inventory and were running at close to 75 peer cent capacity. But now they are running at higher capacities with demand picking up especially by original equipment manufacturers.”
 
After showing a negative growth for the past six months, the commercial vehicle industry posted a marginal growth in March this year. Even the passenger vehicle market showed positive growth after being in the negative zone for three months (December 2008-February 2009). Automotive Tyre Manufacturers Association Director General Rajiv Budhraja said that the industry faced problems since rubber was not being released in the local market.
 
He added that there was some demand from the auto industry, but that it was not the major reason for a price rise. “With all the tyre plants running the companies will double their imports this year (2009-10) to 1.6 lakh tonne compared to the previous year as rubber is not available locally,” he said.

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