Shares of tyre companies like Ceat, Apollo Tyres, JK Tyres and MRF Tyres surged 2-20 percent intraday on Monday riding on decline in rubber prices.
According to Rubber Board of India, domestic rubber prices have seen sharpest fall in five years, hitting Rs 126 per kg. Rubber prices are down 25 percent since average of Rs 169/kg seen in January.
A slowdown in demand from China, one of the biggest consumers of rubber, along with oversupply in the global markets from countries such as Thailand, sent international rubber prices spiralling down in the last one year.
Another reason is that in Indonesia, the world’s second-largest natural rubber producer, but demand has not matched the surge in supply over the past three years. This has pushed down rubber prices, with rubber futures plunging 28 percent this year to the lowest level in nearly five years, say a media report.
Also fall in crude prices to USD 100 per barrel is a big positive for tyre makers as 30 percent of raw material cost comes from crude derivatives while 50 percent comes from natural rubber.
| Company Name | Last | % Chg |
| Price | ||
| Apollo Tyres | 208.4 | 7.67 |
| Balkrishna Ind | 792 | 2.53 |
| Ceat | 778.2 | 20 |
| Dunlop India | 10.66 | 4.92 |
| Falcon Tyres | 18.25 | 4.89 |
| Goodyear | 635 | 6.48 |
| Govind Rubber | 20.8 | 9.76 |
| JK Tyre & Ind | 364.25 | 16.13 |
| MRF | 28885 | 6.34 |
– moneycontrol.com
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