Carbon black shortage forcing tyre factory shutdowns: ATMA

Source: The Hitavada      Date: 20 Feb 2018 11:34:55


TYRE manufacturers’ body ATMA on Monday said that shortage of carbon black, a key ingredient for tyre manufacturing, in the domestic market had led to the unplanned shutdown of factories. In a representation to Ministry of Commerce & Industry, Automotive Tyre Manufacturers Association (ATMA) asked the Government to allow domestic tyre makers duty free import of the raw material to the extent of existing gap between demand and supply in order to enable them continue with their planned production.

According to ATMA, tyre industry is left with no other choice but to import carbon black to meet domestic deficit, but a steep Anti-Dumping Duty amounting to approximately 40 per cent of the import price is proving to be prohibitive.
“Some of the ATMA member companies are severely affected by the shortage of carbon black and capacity utilisation levels have come down,” ATMA Convener Supply Chain and Resources Group and MRF VP Materials, Mohan Kurian said in a statement.

He further said:”Now production planning is being tweaked to match with the availability of carbon black and thereby potential production is not getting fully achieved. A mismatch of in-capacity addition by domestic carbon black industry in comparison to growing demand from the domestic tyre industry and increased exports of the
raw material have led to domestic deficit.”

The industry body said in 2017-18, domestic carbon black production stood at 8.4 lakh tonne, while actual consumption was at 9 lakh tonne and exports were at 1.2 lakh tonne. Import of the raw material stood at 96,000 tonne. In 2016-17, domestic carbon black production was at 8.1 lakh tonne, with a similar amount of consumption, while exports were at 1.14 lakh tonne and imports stood at 84,000 tonne.

China is the single largest producer of carbon black in the world accounting for about 40 per cent of global production but a steep anti-dumping duty has been imposed on import of the raw material from the country, ATMA added. ATMA said that it had asked the Government to allow tyre companies to import carbon black on a duty-free basis to
the extent of the existing gap between demand and supply
to enable the domestic tyre industry continue with its planned production.