Rubber prices have slumped to a two-year low but tyre stocks have kept rolling in the green.
The stocks of tyre companies such as Apollo Tyres, Ceat and JK Tyre, were up over 9 percent on Monday. All the major tyre stocks were on the rise at 3:10pm on the BSE today.
Natural rubber prices lowered by 24 percent in Q3 over average last year. While Kerala rubber prices were lower by 11%, and butadiene was 1 percent down. This has led to the expected increase in the margins of tyre companies. Also, major tyre players have made capital expenditure (CapEx), according to Equirus, leading to gains in tyre companies' stock prices.
According to data, the on-year global production of rubber has been on the rise, but consumption didn't grow in sync this year, though 2021 was a great time with a 10.9 percent run-up.