Tyre Industry in India is witnessing impact both on transit times and freight rates in view of the Red Sea disruption, hitting both tyre exports and raw material imports.

Rajiv Budhraja, Director General, Automotive Tyre Manufacturers’ Association (ATMA), said India-Rotterdam freight rates moved up 3-4 times and transit times have increased by 14 days due to the diversion of ships through Cape of Good Hope.

On the India-US movement, he said no impact has been witnessed on transit times to the West coast, while it has gone up by 8-10 days to the East coast. Freight rates have doubled to West coast, while the surge to East coast was 40 per cent. The container availability has also impacted to some extent although not to an extent to disrupt operations, he said.

The Red Sea is a prominent channel for sending shipments to the US East Coast, Europe, West Asia East and Africa from India, he added.

Rajiv Tharian, working with Southland Rubber Group, a major processor and importer of natural rubber to Indian market told businessline that freight from Asia to Europe sector increased by 300 per cent, Asia to US by about 200 per cent and freights for many other routes including Africa to Asia by around 100 per cent.

Besides, there is acute shortage of containers and the higher circulation time for boxes in voyage is causing severe delays in planned shipments from all locations. The emerging situation has led to many of tyre companies especially in the US and Europe to buy aggressively for nearby shipments and increase their buffer stock of raw materials including NR due to risk of delays in shipping in coming weeks and months, he said.

This has added more pressure to the NR supply chain which is already constrained by lower than normal production in recent months from largest 3 producing nations such as Thailand, Indonesia and Vietnam. The peak production season of natural rubber is from November to February after which many countries go into wintering or low production season, he said.

However, George Valy, president of Indian Rubber Dealers Federation said the Red Sea crisis has not impacted domestic procurement by the industry despite the market witnessing a tight availability in the fag end of the production season. Natural rubber prices have moved by ₹6 per kg touching ₹160 per kg, thanks to lower availability. The crisis also resulted in delayed rubber imports correspondingly.

Related Topics