CBMA denies shortage of carbon back in the country. The association has asserted that the country in fact holds surplus quantities after production and is compelled to export for optimum utilization of the production capacities.

India: In response to the concerns raised by plastic manufacturers regarding the shortage of carbon black in the country due to which plastic manufacturing is at a loss, Carbon black Manufacturers Association (CMBA) has claimed there is no shortage of Carbon Black.

The CBMA in an interview stated that there was no shortage of carbon black in the country, rather there is a surplus production in the country. However, there is a shortfall in the demand, which has propelled exports considering the significant imports of carbon black made by manufacturers due to exemption schemes offered by the Government.

Tire makers body Automotive Tire Manufacturers Association (ATMA) had earlier reported that the shortage of carbon black was forcing unplanned shutting down of factories.

Carbon black manufactures including Phillips Carbon Black, SKI Carbon Black, Himadri Specialty Chemicals and Continental Carbon have a net capacity of 10.58 lakh MT, however the annual requirement is around 7.98 lakh MT (excluding demands met through imports). The end-use industry meets approximately 15% of the total requirement by imports owing to the exemptions on import duties leading to exports of almost same volume by the carbon black manufacturers.

This establishes the fact that Carbon Black Manufacturers utilize only about 75% of their total capacity. Under the given condition, Carbon Black Manufacturers have no choice but to export a similar volume for the optimum utilization of their production capabilities.

Moreover, due to the lack of demand for Carbon Black in the Country, the industry was initially struggling very hard to create demand for its product in the global market, where consumers seek long term contracts (generally 6-12 months) prior to considering imports. The industry can without difficulty operate plants in the region of 90-95% while meeting the entire requirement of the Country if the consumers make firm commitments.

The current shutdown of production by Continental Carbon due to Govt. orders is temporary and the company is trying to meet the legal obligations and resume production shortly. The capacities available in the country after excluding capacities with Continental Carbon are enough to meet the total demand for carbon black in the Country.

The association stated that due to availability of economically cheaper raw material and other inputs (carbon black in particular), the global tire manufacturers are attracted to India and are contributing to generating employment in this sector.

Carbon Black manufacturers have made huge investments in R&D, introducing new technologies and products, over the last few years. The expansion in production capacities would be possible if restrictions are imposed on carbon black imports from surplus carbon black manufacturers in countries that are trying to dump their excess produce in India.

According to TechSci Research, the Carbon black is used as a strengthening filler in tires. In 2016-17, the countries largest carbon maker Philips Carbon Black, reported a strong growth of over 15 percent as the demand of Carbon black is increasing due to growing production and sales of automobiles in India. Many manufacturers of Carbon black will be investing heavily on their plants over the next five years in the country. Moreover, accessibility of cheaper energy resources and lower taxes are the main motives attracting the global tire manufacturers to India and this trend is likely to boost the consumption of carbon black in the Indian market over the next five years as well.

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