India NBR prices near peak on slowing demand amid carbon black crunch

SINGAPORE (ICIS)–Acrylonitrile butadiene rubber (NBR) prices in India were steady this week, weighed down by slowing demand amid the carbon black supply crunch.

On 15 March, NBR spot prices were assessed flat week on week at $2,550-2,600/tonne CFR (cost & freight) India, after having risen by about 23% since late December 2017, ICIS data showed.

NBR’s strong price gains in recent months had been primarily driven by demand from India’s rice milling sector.

India is a major importer of NBR, which is used in a wide range of products, including belts and hoses, rice milling rollers, footwear, oil seals, and grommets and gaskets in the automotive industry.

“The carbon black shortage in India is really a serious issue and is impacting on demand for rubber, including NBR,” a rubber trader said.

Production of tyres and other rubber products is being curtailed by the price surge of key ingredient carbon black, which is in severe shortage. This, in turn, has weighed on NBR demand.

“Demand is slow in March in India due to the carbon black issue,” an NBR supplier said.

Adding to the woes of small and medium-sized rubber makers in India are the hefty tariffs of about $400/tonne imposed on carbon black imports from China.

“The disruption in carbon black supplies in China and its high cost have forced several small and medium-sized rubber producers in India to cut down their production output or shut down,” a rubber trader said.

China is a major producer of carbon black and its supply shrank following recent massive shutdowns of highly polluting plants in the country caused by the Chinese government’s intensifying environmental protection campaign.

Focus article by Helen Yan