Tyre stocks up on fall in rubber prices

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The share price of tyre companies jumped 6.35 per cent on Monday on expectations of improvement in margins following a sharp decline in prices.

The stock of rose the maximum to Rs 43,073.35 apiece on the BSE, followed by Ceat, which rose 6.04 per cent to Rs 1,128.30 a piece.  With Monday’s gain, thestock of Goodyear India (2.85 per cent) and Apollo Tyres (3.73 per cent) hit their respective 52-week highs.

“On anticipation of better profit margins, are buying fresh shares,” said an analyst with a large broking firm. Trading currently at Rs 12,014.25 a quintal in the domestic market, natural has hit the lowest in five months following global trends.

The price has nosedived 17 per cent in the past five weeks after hitting a high of Rs 14,428.35 a quintal on August 8. The fall has been attributed to a sudden jump in output. Data compiled by the Rubber Board show India’s natural rubber production rose 11 per cent in July from a year ago to 52,000 tonnes. Imports, meanwhile, fell marginally in July to 41,157 tonnes from 41,917 tonnes, while consumption jumped 4.3 per cent to 83,400 tonnes on a year-on-year basis.

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The fall in prices, however, seems temporary as it is based on the supply cut by major producing countries. Meanwhile, the International Tripartite Rubber Council, a grouping of , and Malaysia, has decided to trim exports by an additional 85,000 tonnes from September to December this year.

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