1,000 small and medium rubber units face closure due to shortage of carbon black

The All-India Rubber Industries Association has urged government to remove anti-dumping duty on imports saying around 1,000 small and medium rubber units are facing closure due to the acute shortage of carbon black, the major raw material used in rubber products.
“Carbon black imports from China, Russia and other countries face anti-dumping duties. Due to this, small and medium rubber units are facing shortage of carbon black and resultant price hike,” Association’s senior vice-president Vikram Makar in Mumbai said.
Carbon black shortage is so severe since the past few months that over 1,000 units are on the verge of closure, which will lead to loss of nearly 2 lakh jobs, while the industry is losing about Rs 750 crore every month, Makar said on Thursday.
Carbon black is the most preferred reinforcing material and filler in rubber products, both in tyre and non-tyre segments, comprising 25 to 30 per cent of the product by weight. It is also used in plastics, paints and inks as colouring pigments.
The domestic rubber industry is seen growing at 8.42 per cent CAGR during 2016-2020. However, the carbon black capacity has not grown in the past couple of years, commensurate with the demand.
Current carbon black demand is 12.85 lakh tonne as against capacity of 9.5 lakh tonne. A gap of 3.25 lakh tonne, thus is primarily due to lack of capacity addition by current carbon black manufacturers in the last two years.
To tide over this crisis the association has urged government to make a few policy amendments immediately to save small and medium sized units from closing down by allowing imports and curb or stop export of carbon black, he said.
Domestic prices of carbon black rose nearly 60 per cent over the last six months and nearly 30 per cent in the past three months itself, he added.