Rubber products industry hit by rising synthetic variety prices

KOCHI: 

                                                

The rubber products industry, both tire, and non-tire are feeling the pinch of soaring prices of several forms of synthetic rubber prices even as it is grappling with a natural rubber shortage in the domestic market. 

India is totally dependent on the import of several varieties of synthetic rubber (SR) l, the use of which has gone up in a tire and non-tire sectors. 
“Certain forms of SR like solution SBR, chlorobutyl and bromobutyl are exclusively imported. The products have become dear and the rupee depreciation has increased the import cost further, putting pressure on our margins,” said Ashish Pandey, vice-president, materials of JK Tyres. 

“High performing tires use more SR,” he said, adding that the hopes of the tire industry for better performance in the second half of the year were dashed by the Kerala floods, rupee fall and oil price hike. 
The tire industry is already grappling with a shortage of natural rubber (NR) after the floods in Kerala, Pandey said. It is now importing more NR to bridge the gap. 

The non-tire industry anticipates around 8 percent increase in immediate cost from the rise in SR prices. “The basic SR is partly produced in India. But it is the specialty SR like EPDM and NBR which are used in rubber products like conveyor belts and hoses that are imported,” said Vikram Makkar, senior vice-president of All India Rubber Industries Association. 

The usage of NR and SR in the non-tire sector is almost evenly in the ratio 50:50. “Globally, it is 80:20 in favor of SR. 

We still use more NR in generic products,” he said. As per Rubber Board data, SR production recorded a huge growth of 48.7 percent at 3,31,221 tonnes in 2017-18 over the previous year. This makes up just over half of the requirement with consumption rising by 6 percent in the year to 6,33,975 tonnes. 

The rest is imported. “China is the largest consumer and demand from the country is sluggish because of tariff war with the US,” said a senior officer of a Mumbai-based SR importer and distributor.

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