HomeMarket CommoditiesCarbon Black shortage may lead to tyre plants shutdown, says ATMA Carbon Black shortage may lead to tyre plants shutdown, says ATMA

Finanacial Express, R Ravichandran, Feb20, 2018

The crunch in domestic availability of Carbon Black has reached such an extent that several domestic tyre companies have been forced to take unplanned shutdowns in the recent past for want of this essential raw material. Alarmed over the crisis, industry body Automotive Tyre Manufacturers Association (ATMA) has represented the case to the union ministry of commerce & industry, asking for facilitating easy import of the raw material to ride out the difficult phase, which is having an adverse impact on tyre production. According to ATMA, factors that have led to the domestic deficit in Carbon Black include a mismatch in capacity addition by the domestic industry in comparison with growing demand from domestic tyre makers and increased exports by the carbon black manufacturers.
Domestic demand-supply gap in carbon black, which was 14% in FY17, has gone up to 20% in FY18.Though the estimated overall production of Carbon Black for the fiscal estimated at 840 kilo tonne against 810 kilo tonne in the previous fiscal, the consumption has been pegged at 900 kilo tonne this fiscal (810 kilo tonne last fiscal). With exports of 180 kilo tonne out of this production, the overall supply gap is estimated at 240 kilo tonne compared to 114 kilo tonne last fiscal. The imports for the fiscal pegged at 94 kilo tonne against last fiscal’s 84 kilo tonne, ATMA said.
“As it is, domestic tyre industry is facing the concern of shortfall in overall availability of natural rubber (NR) on a regular basis. Carbon Black shortage has only added to the woes of tyre industry in India,” said Mohan Kurian, convener, ATMA supply chain & resources (SCR) group. Late last year, ATMA held a partners summit especially to engage with Carbon Black manufacturers and apprise them of the domestic shortage. Notwithstanding the domestic crunch, steep anti-dumping duty has been imposed on the imports from China, the single-largest producer of Carbon Black, accounting for approximately 40% of its global production.
“Sustainable ways of improving raw material availability for the tyre industry need to be worked out for continuation of ‘Make in India’ drive in this vital sector. Domestic tyre industry is anticipating good growth in tyre demand after a prolonged period of overall slowdown. It becomes imperative to improve the Carbon Black availability situation urgently,” Kurian added.

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