Tyre firms stock up rubber on price dip

KOCHI: Car tyre companies are stocking up on rubber as prices slid for the third day after the Japan earthquake to hit a five-month low on Tuesday.
"With a fall in prices we are buying small quantities from the local market," said S Gopakumar, who heads the Kerala unit of India's biggest tyre maker Apollo Tyres . "Prices have to be steady before companies start buying large quantities to ramp up their inventory," he said.
Rubber is cheaper by 15% on Tuesday compared to March 10. International prices slumped from Rs 244.92 per kg on March 10 to Rs 201.38 per kg on Tuesday.
On NMCE, the April contract that fell 2.5 % fall on Monday dropped further to Rs 189.88 per kg on Tuesday morning before recovering to Rs 198.60. Market players said it was the demand support from tyre companies that cushioned the fall in prices.
George Valy , president of industry body Indian Rubber Dealers Federation , said tyre companies were active in the market but face budgetary constraints in the last month of the current fiscal. "Prices fell when the speculators moved away from the market," he pointed out.
Thailand, the biggest producer, has announced it will curtail rubber exports and its procurement to arrest the price slide. The Association of Natural Rubber Producing Countries said the impact of the Japan quake would be minimal on rubber. It said the disaster-hit area is far from Japan's economic hub, which is stretched from Tokyo to Osaka.