Delhi Delhi. CRISIL, in its recent report, has said that tire manufacturers are struggling with rising prices of natural rubber, which have increased by more than 33 percent in the last five months of FY 2025. The report said that the increasing supply and rising cost of natural rubber has created a challenging environment for tire manufacturers. Depending on the grade, natural rubber accounts for 20-40 percent of the tire manufacturing process. The tire industry contributes about 80 percent to the consumption of natural rubber in the country. Natural rubber prices, which have remained low for the last decade, have now crossed the Rs 200 per kg mark.

The report said this latest surge is attributed to fundamental imbalances in supply and demand rather than short-term disruptions. The report said this latest surge is attributed to fundamental imbalances in supply and demand rather than short-term disruptions. The situation is reminiscent of the price surge seen in 2011, when prices reached all-time highs following the global financial crisis.

“However, by the end of 2023, skyrocketing prices have again crossed the Rs 200 per kg mark, while challenges remain – and the tight supply of natural rubber has put a dampener on the industry,” the report said. has cast a long shadow, while demand remains healthy driven by the continued expansion of the automobile industry and other major consumer industries.” The report said this latest surge is attributed to fundamental imbalances in supply and demand rather than short-term disruptions. According to the report, the current surge in natural rubber prices is mainly due to demand exceeding global production capacity. Between fiscal years 2011 and 2023, global natural rubber production is expected to grow by 35 percent, while demand will increase by 40 percent. This growing gap has forced the market to struggle to meet the needs of tire manufacturers.