Natural rubber at 1-year high; tyre makers may be hit

Natural rubber prices are trading at a one-year high of Rs 133/kg. The average rubber price for the fourth quarter of FY16 was Rs 100/kg, reports Sonia Shenoy of CNBC-TV18, quoting sources. Rubber prices have seen an upswing of 16 percent from the beginning of April.Global rubber indices have reached a nine-month high.Surging rubber prices are definitely negative news for tyre makers as rubber forms a major chunk of their raw material.Prices have gone up due to demand-supply adjustment happening globally, reports Shenoy. Rubber producing nations like Indonesia and Philippines have cut down on their production in the last six months, as producing rubber at a low rate of USD 2/kg was not remunerative enough.  CEAT Tyres has indicated that it expects a steep cut in tyre margins from the first quarter of FY17. Watch video for more details