Global rubber prices fall as India’s internal market sets 12 year high

Singapore – The global price of rubber is currently trading below $2 U.S. per kilogram while India reports price of natural rubber in the domestic market, which surpassed Rs. 200 per kg for the first time in 12 years in June this year, has marked the all-time record. According to the daily price report from India’s Rubber Board, the price for ribbed smoked rubber (RSS) – 4 grade (sheet rubber) hit $2.90 U.S. (Rs. 244) per kg in Kottayam market.

The Global decline is a reversal from earlier this year when rubber prices spiked on supply concerns that were prompted by a drought in major rubber-producing nations Vietnam and Thailand. However, earlier concerns about supply have now been replaced with worries over waning demand for rubber, pushing global prices downward.

Motor vehicle tires account for more than 70% of rubber demand, and China is both the world’s largest importer of rubber and the largest automotive market. Demand within China has steadily weakened as motor vehicle sales slump, particularly sales of electric vehicles.

Meanwhile, Indian rubber farmers and dealers are closely monitoring market developments, anticipating the involvement of major tire companies to regulate the market. According to a dealer, JK Tyres and CEAT have depleted their stocks and have already purchased sheet rubber at prices ranging from Rs. 250 to Rs. 255 from domestic market. “On the other hand, companies like MRF and Apollo refrained from purchasing rubber from dealers when prices exceeded Rs. 232 per kilogram.