Natural rubber prices, key raw material for making tyres, are likely to remain firm this week on global cues coupled with strong demand from tyre makers.
"International prices are at record high levels and are likely to remain at that levels in near future due to strong demand. Domestic prices are following the international trend," Indian Rubber Dealers Federation Treasurer Ibrahim Jalal told PTI.
He said there is no problem of supply and as long as international prices of the commodity remains high, the prices of natural rubber in the domestic market would also be high.Natural rubber prices rallied for the fourth straight day to touch a fresh all-time high of Rs 215 per kg in the domestic market due to a fall in arrivals and firm global cues, which could have an impact on tyre-makers' profit margins.
Prices of natural rubber today closed at Rs 214.5 per kg in the Kottayam and Kochi, key trading markets of the commodity.
Prices of natural rubber in the international market also touched a new high of Rs 239 per kg on supply concerns due to adverse weather conditions in key growing areas coupled with strong demand from China.
According to industry experts, a surge in demand from the US on the back of better-than-expected growth in the automotive segment may further push the global prices of the commodity and the impact will also be felt in domestic markets.
Natural rubber prices have been on the rise for the past few months due to disruption of production in Kerala, which accounts for 90 per cent of the country's production, coupled with rally in international prices of the commodity.
India's production of natural rubber in 2010 is estimated at around 850,000 tonnes, whereas the total demand for natural rubber in the country is nearly one million tonnes per annum.
