Tyre companies may raise prices again next month due to an increase in natural rubber (NR) rates in recent weeks. The increase might be 5% on average, said industry sources.
This will be the third price increase by the companies after the lockdown.
The companies have already increased prices by 2-4% and this has happened due to an increase in prices of crude derivatives. Oil and its linked derivatives such as carbon black form an integral part of a tyre company’s raw material basket.
The price of natural rubber has increased from Rs 100 a kg to Rs 180 a kg. This surge in prices would eventually affect the price of vehicles as it is going to be costlier than before.
The manufacturers have attributed the latest price increases to rising commodity costs. But this trend largely went unnoticed in the first two quarters when the raw material costs, which comprise over two-thirds of the total cost of producing a tyre, were hovering at the lowest levels.
Tyres manufactured in India have a ratio of 40% natural rubber and 50% of synthetics (petrol derivatives). The remaining 10% consists of miscellaneous inputs like steel.
In June 2020, the government imposed restrictions on tyre import from China to promote domestic production.
