Monday, October 26, 2015

Imports a set-back for industry

The increase in imports in the T&B segment has been a cause for concern as it accounts for around 60% of domestic tyre industry's revenue. The lower prices is attracting price sensitive customers and thus were using bias tyres, as imported TBR tyres are priced 25% lower than domestically produced TBR tyres. The import volume of tyres in T&B and two-wheeler segments increased by 25.3% and 120.5% respectively on a y-o-y basis in the first quarter of 2015-16. Chinese imports in the T&B segment increased 138% y-o-y in the first quarter of 2015-16, accounting for around 80% of the total imports in this segment. The increase in imports from China is likely to continue, driven by reduced demand in China as well as the imposition of high countervailing and anti-dumping duties by the US on Chinese tyres.

Today the benchmark RSS4 grade rubber closed at `.114 a kg at Kottayam, while RSS3 grade closed at `.84 a kg at Bangkok and Malaysian SMR20 closed at `.81.43 a kg. On National Multi Commodity Exchange November 2015 futures closed at `.113.10 a kg, December at `.112.55, January 2016 at `.112.50 and February closed at `.113.50 a kg. On Tokyo Commodity Exchange, November 2015 futures series closed at ¥151.9 a kg, December 2015 at ¥157.3, January 2016 at ¥160.1, February at ¥162.7 and the contract for delivery in March 2016 closed at ¥164.5 a kg. On Tuesday, most probably Tocom futures contract for delivery in April 2016 may trade in negative range of ¥163 & ¥157 a kg.

To read Rubber4U – 1st November 2015 issue:
For 2015-16 Rubber Forecast:

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