Tyre stocks ride high owing to counter veiling duty

Tyre stocks were speeding on the bourses on Tuesday as the government decided to impose a counter-veiling duty on truck and bus radial tyre imports from China. This duty is over and above the anti-dumping duty which is already imposed on the Chinese truck and bus radial imports.

China is a major exporter of tyres to India. It dumps tyres into the Indian replacement market. Radial tyres constitute about 50 per cent of the tyre demand and about 20-25 per cent requirement is met through imports mainly through China. This will narrow the price differential between Chinese and domestic tyre and thus boost the demand for domestic tyre manufacturers.

This development came at a time when tyre companies are going through turbulence due to muted auto sales in the country.

With this positive development, the tyre stocks surged on the bourses. Ceat Limited surged nearly 4 per cent to touch an intra-day high of Rs. 939.8 apiece. JK Tyre surged nearly 7 per cent, while MRF and Apollo Tyre surged nearly 3 per cent from its previous close.