Reflecting the slowdown in the automobile sector and the off take of new tyres, rubber consumption in India has fallen behind production. This is primarily because the slowdown has begun to affect truck and bus tyres consumption as well, which together constitute close to 70 per cent of the total rubber consumption by the automotive sector, Mr N Radhakrishnan, Member of the Cochin Rubber Merchants Association said.
After a long gap, growth in rubber consumption has fallen by 8 per cent in September to 74,000 tonnes, much below the industry expectations, Rubber Board sources said. But favourable climate and increased tapping intensity during the second half of last month has ensured that production has remained firm. Production grew by 3.5 per cent over last year to 80,200 tonnes last month.
The future demand will depend on the pace of industrial growth and demand for new automobiles. There has been a slowdown in the demand for new bus and truck tyres as fleet owners and operators have been deferring the purchase decisions of new tyres, Mr Radhakrishnan said. Whenever possible, they have been resorting to re-treading rather than replacement.
The increased interest rates and revision in the price of petroleum products has added to the financial burden of the operators and customers, Mr Radhakrishnan pointed out. As the fleet operators have become more cost conscious, they have been cutting costs on all fronts, including replacing of old tyres with new ones.
The coming months until February are likely to be favourable for rubber production, Rubber Board sources said. That is provided the North East monsoon maintains its regular schedule and pattern. While the economic slowdown has impacted the Indian automobile industry and tyre consumption, the same seems to be holding good for the international economy as well. Rubber prices have slipped below the Indian prices after a gap of several months mainly on account of uncertainties in several European countries and slowdown among the Western economies.
DEMAND FROM CHINA
The principal driver for the slowdown in global rubber purchases has been a fall in demand from China, Mr Radhakrishnan said. Reports indicate that not only is the Chinese economy slowing down but that its exports have also been affected. China remains one of the biggest exporters of tyres in international markets.
While consumption trends seem to have been affected, production is likely to be on expected lines this year as well. Rubber Board sources said that they expected rubber production to be higher by 4.6 per cent this fiscal.
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