Physical trading of natural rubber by institutions has also stagnated due to industrialization.

KOCHI: The tire industry is expected to suffer a loss of Rs 4, 500-5000 crore in February to 7 6 months due to COVID-19 production disruption.

All tire production facilities have been shut down and are expected to resume operations by mid-April. Rajiv Budhraja, secretary general of the Automotive Tyre Manufacturers Association (ATMA), said, “We are estimating losses assuming that the situation starts improving from 8 When month.”

According to him, it may take six months to resume normal operations. Therefore, the impact of COVID-19 will be felt throughout the financial year, he added.

Bhudraja said that the current crisis started with the regular recession followed by restrictions on vehicular movement. Then the blockade happened. “The sudden shutdown led to accumulation of raw materials, semi-finished and finished products in the supply chain process. It is expected to take at least a month for the production lines to return to normal after resumption of operations. Budhraja said.

Before the crisis began, the industry was performing slightly better than last year. He noted, “By mid-January, the market showed signs of recovery, but then the crisis gradually set in.”

The sector also stagnated as spot trading in natural rubber came to a halt. On the last trading day of March 23, the price of RSS-4, a variety of sheet rubber, fell by 7% to Rs 125 per kilogram, and trading is likely to remain suspended until the industry resumes operations.

On Monday, the Indian Commodity Exchange, Indian Commodity Exchange (ICEX) traded at Rs 116.62 per kilogram for April delivery contract.

“In the last few weeks, only one tire company has been actively buying rubber from the market.” CJ Augustine, secretary general of the Rubber Dealers Federation of India, said that there will be a shortage of rubber once the industry starts functioning again.

Though the overall rubber cutting has declined since February due to warmer weather, he believes traders still have stocks. “With the increase in demand, by May-June monthly rubber prices can reach levels of Rs 130 kg to Rs 140,” he said.