Natural Rubber Price Surge

Analysts are expecting tyre manufacturers’ raw material prices to increase by 10 per cent in 2006 following a 15 per cent increase in 2005. The Deutsche Bank representatives also reported that the 2005 prices increases are “likely…to be more or less fully offset by selling price increases.”

Over last one-and-a-half months, natural rubber increased by 10 per cent to reach $1.75/kilogram, close to the recent high of $1.84/kilogram reached last summer. Overall in 2005, natural rubber price increased by 50 per cent. According to Deutsche Bank, this equates to additional costs of 72 cents per passenger tyre (+2 per cent) and $14.40 per truck tyre (7 per cent).