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Rubber products industry hit by rising synthetic variety prices

Rubber products industry hit by rising synthetic variety prices

The rubber products industry, both tyre and non-tyre, is 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 tyre and nontyre 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, vicepresident, materials of JK Tyres.

“High performing tyres use more SR,” he said, adding that the hopes of the tyre industry for better performance in the second half of the year were dashed by the Kerala floods, rupee fall and oil price hike.

The tyre industry is already grappling with shortage of natural rubber (NR) after the floods in Kerala, Pandey said. It is now importing more NR to bridge the gap.

The non-tyre industry anticipates around 8 per cent increase in immediate cost from the rise in SR prices. “The basic SR is partly produced in India. But it is the speciality 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-tyre sector is almost evenly in the ratio 50:50. “Globally, it is 80:20 in favour 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 per cent 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 per cent 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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