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Carbon black shortage threatens Indian manufacturing industry  

Monday, February 19, 2018

Mumbai, India - The Hindu Business Line reports that a huge shortage of carbon black, one of the key raw materials for making rubber products, has pushed a large number of Indian non-tire 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 tire manufacturers post the increase of import duty on tires to 15 percent from 10 percent. Interestingly, domestic carbon black manufacturers are still exporting 9,000-14,000 tonnes a month despite lower realization. Carbon black in the domestic market is priced at $1,450 a metric ton, while global prices are at about $1,200 a metric ton. Non-tire manufacturers cannot rely on imports as there is a duty of $36.17 a metric ton on imports from Russia and $397 a metric ton from China while it is $494 a metric ton on shipments from other countries. Currently, the carbon black demand, including that of tire manufacturers, is at 12.85 lakh metric tons, while the country’s manufacturing capacity is at 9.5 lakh metric tons. Kamal Chowdhury, president, All India Rubber Industries Association, said the impact of the 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 the shortage in the market. Carbon black is the most preferred reinforcing material and filler in rubber products, both in the tyre and non-tire segments, constituting 30 percent of the product by weight. It is also used in plastics, paints and inks as coloring pigments. The cost component of carbon black is nearing the cost of primary rubber, while it has historically been at half that cost.


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