Natural Rubber (NR) price has picked up sudden pace, in tandem with the crude-driven Synthetic Rubber (SR) price. From Rs 74 per kilo in July, RSS-4 price has climbed to Rs 90 per kilo in domestic bourses, in keeping with the international price of Rs 89 per kilo.
It was the escalation in the SR’s international price that stretched the NR price. Crude prices are ruling at $78.8 per barrel with corresponding implications in SR prices. Thus synthetic SBRs ( Styrene Butadeiene Rubber) as NR-substitute do not hold water this season.
Automative Tyre Manufacturers’ Association (Atma) sources told FEthat it was the continuing volatility in SR market that forced the Indian rubber consumers to dip in large scale into the NR bourses last week. This had triggered a price surge to the point of Rs 4.5 per kilo at one go. The bad news for both buyers and sellers is that the rain-damages and fever epidemic, the stocks are ruling low.But rubber board experts predict that the climatic change in mid-August will push farm-to-factory stock movement, helping inventory build-up in tyre firms. Besides the sunny weather in mid-August, there is an unmistakable market cycle of higher stock movement from small farm holdings just prior to the Onam festival.
This week, apart from the supply shortage, increased demand from industrial buyers last week also had jacked up the prices. Pressed by SR prices, purchase managers of tyre companies had bought 2000 tonne rubber last week. This is the biggest major weekly trading in physical deliveries in recent times.
According to the latest field-level study by Rubber Board, fever had led to production losses of about Rs 6 crore per day. This lean period was on for 75 days from May to June, Board Chairman Sajan Peter said.Following the production-low, dealers estimate the current stock position roughly at 1 lakh tonnes. Tyre industry, however, suspect that the surge of NR price has once again put the producers and dealers on their hoarding gears.