Tyre stocks up on fall in rubber prices

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

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

“On anticipation of better profit margins, investors 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 rubber price 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 from a year ago to 52,000 tonnes. Imports, meanwhile, fell marginally in 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 is based on the supply cut by major producing countries. Meanwhile, the International Tripartite Rubber Council, a grouping of Indonesia, and , has decided to trim exports by an additional 85,000 tonnes from September to December this year.

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