Indian Tyre Industry Faces Carbon Black Shortage

The shortage of carbon black in the domestic market has led to the shutdown of factories off late, informed Automotive Tyre Manufacturers Association (ATMA). Carbon black is an essential ingredient in the manufacturing of tyres.

ATMA made a representation to the Ministry of Commerce & Industry and has asked the ministry to allow the domestic tyre makers to import the raw material duty-free so as to cover up the gap between demand and supply so that the industry can continue with their planned production. As per ATMA, the tyre industry presently is left with no choice other than to import carbon black so as to meet the domestic deficit.

According to ATMA Convener Supply Chain & Resources Group and MRF VP Materials, Mohan Kurian many companies are severely affected by the shortage of the carbon black. He further added that in order to match the availability of carbon black the production has been tweaked accordingly which lead to the underachievement of the production capability. There is a domestic deficit due to the growing demand from the domestic tyre industry due to the mismatch in-capacity addition by domestic carbon black industry.

ATMA has said that while the domestic carbon black production stood at 8.4 lakh tonne, the actual consumption was 9 lakh tonne and exports were at 1.2 lakh tonne in 2017-2018. The import of the raw material was 96,000 tonne in the same period. Whereas in 2016-2017, the domestic carbon black production was at 8.1 tonnes that equalled the consumption, with exports at 1.14 tonne and imports at 84,000 tonnes.

China being the largest producer of carbon black in the world produces 40 percent of the global production but a steep anti-dumping duty has been imposed on import of the raw material, ATMA added. The body has recently asked the Indian government to import the carbon black duty-free for the tyre companies so that the gap between the demand and supply may be met and the domestic tyre industry may continue with its planned production. The anti-dumping duty that is applicable on carbon black imports from China has to be waived in order to improve the domestic availability, ATMA said.

Also, the export of carbon black from India has to be regulated by a way of having a minimum export price, ATMA added. Kurian was of the view that after a long period of slowdown it becomes imperative to improve the carbon black availability as soon as possible for healthy growth of the tyre manufacturing industry in India.

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