JK Tyre Says Raw Material Costs May Rise This Fiscal On Higher Crude Oil Prices
JK Tyre & Industries Ltd. expects raw material prices to rise in the ongoing financial year as the rupee weakened against the dollar and crude oil prices rose.
“With the current rise in crude oil prices and the dollar, which is impacting the industry, we expect the prices of raw material to increase in the third and fourth quarters of the current financial year,” Rajiv Prasad, president (India operations) at the tyremaker, told BloombergQuint in an interaction.
Tyremakers use a mix of natural and synthetic rubber—a derivative of crude oil—as raw material, which comprises 60 percent of input costs.
But Prasad expects demand to improve marginally in the next few months. “The demand has been slowing steadily... We expect it to improve slightly as we enter the festive season.”
That comments come as the automobile sector is in the middle of its worst slump in over two decades. That affected suppliers of paints and tyres to lighting equipment, and even forced companies to layoff contract workers and dealers to shut showrooms.
Watch the full interaction here: