Reuters) – Natural rubber prices in India, the world’s fifth-biggest producer, dropped to their lowest level in more than four years on Monday, following losses in overseas prices and on sluggish demand, three dealers said.
Lower prices would bring down raw material costs for tyre makers, thereby boosting their profitability, as natural rubber makes up more than 40 percent of the cost of a tyre.
The spot price of the most-traded RSS-4 rubber (ribbed, smoked sheet) at the Kottayam market in the top producing Kerala state fell by 300 rupees to 14,100 rupees per 100 kg on Monday, the lowest level since Feb. 20, 2010.
Benchmark Tokyo rubber futures sank to their weakest in more than four years on Monday amid nagging concerns over growth in China, while rising supply could dictate prices of other soft commodities this week.
“Tyre companies are consistently importing natural rubber as it is cheaper in the world market. Higher imports are putting pressure on local prices,” George Valy, president of the Indian Rubber Dealers’ Federation, told Reuters.
CEAT Ltd, JK Tyre and Industries Ltd, MRF Ltd, Balkrishna Industries Ltd and Apollo Tyres Ltd are likely to benefit from the lower prices.
(Reporting by Rajendra Jadhav; Editing by Anand Basu)
– Reuters
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