Market and product

The hopes of Indian rubber products industry has not been fulfilled as synthetic rubber(SR) prices failed to go cheaper even as crude oil prices still rule low. The industry has been pinning their hopes on the bearishness in crude oil prices which normally would make the SR cheaper.

The rubber products industry is currently struggling as demand has taken a downward turn. Synthetic rubber is a crude oil derivative that is used in tyre and other rubber goods. India mostly depend on imports for the supply of synthetic rubber.

Experts in the industry, as quoted by The Economic Times, says the SR suppliers have not yet reduced their prices even though crude oil prices are ruling low. The demand for synthetic rubber is high given the growth in the radialisation of tyres. Radials use more synthetic rubber in comparison with the ordinary tyres.

Synthetic rubber demand is higher in India as against the demand for natural rubber. Rubber Board data says production of synthetic rubber witnessed 35 per cent increase and consumption by 5 per cent during five months to August 2015 from a year ago. However, natural rubber production and consumption decreased during the same period putting the commodity in deep trouble as prices are under severe stress.