Comments
A huge shortage of carbon black, one of the key raw materials for making rubber products, has pushed a large number of non-tyre small and medium rubber companies to the verge of closure.
The shortage of supply has intensified after an increase in demand from large established domestic-tyre manufacturers post the increase of import duty on tyres to 15 per cent from 10 per cent.
Interestingly, domestic carbon black manufacturers are still exporting 9,000-14,000 tonnes a month despite lower realisation. Carbon black in the domestic market is priced at $1,450 a tonne while global prices are at about $1,200 a tonne. Non-tyre manufacturers cannot rely on imports as there is an duty of $36.17 a tonne on imports from Russia and $397 a tonne from China while it is $494 a tonne on shipments from other countries.
Currently, the carbon black demand, including that of tyre manufacturers, is at 12.85 lakh tonnes while the country’s manufacturing capacity is at 9.5 lakh tonnes.
Kamal Chowdhury, President, All India Rubber Industries Association, said the impact of carbon black shortage is so severe over the past few months that over 1,000 small-scale units are on the verge of closure leading to loss of nearly 2 lakh jobs, while the entire industry is losing about ₹750 crore every month. The largest carbon black manufacturers in India include Philips Carbon Black, SKI Carbon Black and Himadri Speciality Chemicals.
The association has moved the government to remove the import duty till the domestic supply improves. The small and medium units are involved in making various rubber products such as conveyor belts and auto parts.
It has also asked the government to conduct cost audit on carbon black manufacturing companies to find whether the companies have jacked up the prices taking advantage of shortage in the market.
Carbon black is the most preferred reinforcing material and filler in rubber products, both in tyre and non-tyre segments, constituting 30 per cent of the product by weight. It is also used in plastics, paints and inks as colouring pigments. The cost component of carbon black is nearing the cost of primary rubber, while it has historically been at half that cost.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.