Tire demand will boost Indian rubber imports

According to the news on August 14 in Mumbai, India, the recovery of the Indian automobile industry may boost the import of natural rubber. In this fiscal year, India's import of natural rubber for tire manufacturing may increase by 25% to a record level, which may bring some support to the global rubber price hovering at a low level for several years.

The price of natural rubber in the international market fell by more than 25% this year due to concerns about weak economic growth in China, a major consumer, and oversupply in major Southeast Asian producers such as Thailand and Indonesia.

India mainly imports natural rubber from Thailand, Malaysia, Indonesia and Vietnam, and imported 325190 tons in the last fiscal year as of March 31. India is the fifth largest natural rubber producer in the world, but its rubber imports have tripled in the past six years due to the rapid expansion of the automotive industry.

Rajiv budhraja, director general of the automotive tyre manufacturers association of India, estimated that the consumption of natural rubber in 2014/15 would reach a record of more than 1million tons, compared with 981520 tons in the previous year.

Despite the increasing demand in the Indian market, the short-term support for global rubber prices is limited, because the rubber prices in the international market are mainly affected by China's demand. So far this year, China has imported 2.45 million tons of rubber.

In addition, the private and public rubber inventory in Thailand is huge, which was 500000 tons at the end of 2013, including 200000 tons purchased by the government in 2012/13 to support the market. About one third of global natural rubber production comes from Thailand, and about 90% of Thai rubber is exported.

However, the expected large increase in Indian rubber demand may boost imports and support rubber prices in the long term.