You are here: Home » Companies » Industry
Business Standard

Acute shortage of carbon black chokes non-tyre rubber companies

Prices of carbon black have almost doubled in six months and trade at Rs 130 a kg in India

Dilip Kumar Jha  |  Mumbai 

Rubber, rubber exports

An acute shortage of is feared to have made the $3 billion (Rs 200 billion) non-tyre cut production by 15 per cent over the past six months.

contributes nearly 30 per cent to the input cost for the The units are now staring at job losses and closure of units after the government levied an anti-dumping duty on tyre imports. for non-tyre manufacturers has since been diverted to tyre makers, leaving non-tyre players struggling to get the crucial raw material.

Chairman and of Industries Vikram Makar said: “Since the anti-dumping duty was levied, tyre production in has gone up by nearly 25 per cent to meet the rising demand. This led to supply diversion of from non-tyre manufacturers to tyre manufacturers, who have stronger financial muscle. Most manufacturers are small and medium enterprises (SMEs) and cannot compete with tyre manufacturers when price increases. We, therefore, want the government to review its anti-dumping duty decision to safeguard the domestic producers.”

Prices of have almost doubled in six months and trade at Rs 130 a kg in Global prices are around $1,500 a tonne, making import unviable.

“Around 1,000 SME units are on the verge of closure and the remaining have reduced their operational capability due to non-availability or carbon black,” said Vishnu Bhimrajka, director, Polmann Ltd. “Domestic suppliers have failed to meet non-tyre manufacturers’ demand. Import is virtually impossible due to high anti-dumping duty. We can comfortably say that the fears job losses of around 200,000 if supply remains constrained for some more time.”

Suppliers have started defaulting on orders, too, said sources.

There are 40 tyre manufacturers and around 6,000 non-tyre manufacturers producing seals, conveyor belts, extruded and moulded profiles, etc. These products are used in auto, railway, defence, aerospace and many such areas. Being a labour-intensive sector, these units cumulatively employ around 1 million, primarily unskilled workers.

The has urged the government to review its decision to levy anti-dumping duty of $397.10 a tonne, $36.17 a tonne and $494 a tonne from China, and the rest of the world, respectively. The anti-dumping duty was levied in November 2015 for five years.

“The user did not oppose the government’s move as the decision was in the interest of domestic producers,” said Vinod Bansal, managing director, Jayashree Polymers. “But they are suffering, as manufacturers transport only a small portion of orders. This affects our commitment to users of end products. We therefore, want the government to intervene to ease out supply to non-tyre manufacturers.”

has a production capacity of around 1.2 million tonnes, almost that of the consumption by tyre and non-tyre manufacturers. The major manufacturers are SKI Carbon (a company), Phillips Ltd and Himadri Speciality Chemical Ltd.

First Published: Fri, February 16 2018. 05:54 IST