KOCHI: Costlier synthetic rubber (SR) in the wake of rising crude oil prices has dealt another blow to the rubber industry, which had already been reeling under a severe shortage of carbon black and other raw materials.
India imports more than half its requirement of SR, which is a derivative of crude oil. While imported SR varieties have increased 20-25%, industry players said that local manufacturers were poised to raise prices.
“Prices of imported styrene butadiene have gone up from $1,600-1,700 per tonne to $2,000 in a week. Domestic manufacturers are likely to follow suit by June,’’ said Vishal Jhunjhunwala, director of Bombay Chemical and Rubber Products. Styrene butadiene (SBR) and poly butadiene are the chief forms of SR used by the rubber industry Growing sales of passenger cars in recent years have led to increased use of SR by the tyre industry.
Unlike in the case of bus and truck radial tyres, the percentage of SR used is higher in passenger car radials for speed and performance.
“We were hoping to supplement the natural rubber deficit with SR. But that is not possible now with rising prices,’’ said Rajiv Budhraja, director general of Automotive Tyre Manufacturers’ Association. The depreciation of rupee to 68 against the US dollar has aggravated the problem, he said. Of the total rubber consumed by the non-tyre industry, SR accounts for 40%.
“SR prices are rising at a time when we are facing a 50% deficit in carbon black, an important raw material for the industry,’’ said Kamal Chaudhary, president of the All India RubberNSE 0.00 % Industries Association.
In the past few years, the domestic production of SR, mainly by Reliance IndustriesNSE -0.28 %
and Indian Synthetic Rubber (a joint venture of Indian Oil), has steadily improved, thus reducing the industry’s dependency on imports. In 2016-17, SR production grew 11.5% from a year ago to 2,22,744 tonnes while imports grew 8% to 3,79,791 tonnes. But the scenario is changing fast.
As imports have dropped, imported SR varieties have gone up 20-25% while local firms too are raising rates.
Source: The Economic Times