Market Trends of India Carbon Black Industry
Furnace Process Type to Dominate the Carbon Black Market in India
- The furnace black process is the most modern and widely utilized process to manufacture carbon black. The process accounts for about 90% of the production of carbon black, as the majority of the manufacturers in the market use this process to produce carbon black. The furnace black process uses aromatic liquid hydrocarbon feedstock, which is heated and injected continuously into the combustion zone of a natural gas-fired furnace. Here it is decomposed to form carbon black.
- The furnace black process is suitable for high carbon black production due to its efficiency and high yield. It allows wide control over its properties, such as particle size or structure.
- The furnace designs and the provided operating conditions determine the particle size and the other physical and chemical properties of the carbon black produced through the process. The carbon black manufactured from the process mainly consists of particle sizes ranging from 10 to 80 nanometers.
- It is widely used in industrial rubber production as a filler and pigment in various particle sizes and structures in plastics, inks, paints, and coatings. The carbon black manufactured through the process is largely utilized in vehicle tires for various purposes. For instance, it helps to transfer the heat away from the tire's tread and the belt area, thereby decreasing thermal damage and prolonging tire life. Thus, the tire industry is a prominent influencer in the demand for the process type.
- Tire exports from India rose by approximately 15% from April to December in FY 2022 concerning the previous year. According to the Ministry of Commerce, India exported tires worth INR 178.16 billion (~USD 2.15 billion) compared to INR 155.07 billion (~USD 1.88 billion) during the same period in FY 2021. Growth in exports is an indication of the increase in the production of tires from the country.
- The furnace black method offers environmental and work safety benefits during production. The fully enclosed facility minimizes the emission of process gases and dust, reducing health risks.
- Besides its economic, environmental, and technological advantages, the furnace black process offers greater flexibility as it is competent in producing more types of carbon black than any other process.
- All these factors are expected to influence manufacturers to prefer the furnace black method to produce carbon black in India in the coming years.
Understand The Key Trends Shaping This Market
Download Sample
Growing Demand from Tire Industry
- The major consumer of carbon black stands to be the tire and rubber industry in India, where more than 70% of carbon black is consumed. India is one of the largest producers and consumers of rubber after China in the Asia-Pacific region.
- The automotive industry in India is an important indicator of how well the Indian economy is performing, as this sector plays a vital role in both technological advancements and macroeconomic expansion. The sector's performance also gives a prime indication of the demand for tires in the Indian market. As of June 2023, the Indian automobile industry contributes almost 6.4% of India's GDP and 35% of manufacturing GDP and is a leading employment provider.
- As per OICA, vehicle production in India reached a total of 5.45 million units in 2022, which indicates an increase of 24% compared to the number of units produced in 2021. The increased number of automobiles indicates the increased demand for tires and other materials where carbon black is utilized in the automotive industry.
- Observing the consecutive growth in automotive sales in 2021 and 2022, various manufacturers announced heavy investments in increasing their automotive production capacities in the coming years. For instance, in March 2022, Maruti Suzuki India Limited announced an increase in capacity by nearly 1.1 million units with an investment of approximately INR 200 crores (~USD 2.41 billion) in its new factory in Kharkhoda, Haryana, by 2028. The first 250,000 units will be commissioned by 2025. Moroever, to cater to the continuously increasing demand for its passenger vehicles, the company also decided to increase production capacity at the Manesar plant by 100,000 units by 2024.
- Furthermore, due to the continuous increase in demand for tires from the automotive industry, various tire manufacturers are investing in new production facilities in India. For instance, Yokohama Rubber Co. commenced production of off-road tires in Vishakhapatnam, Andhra Pradesh, in April 2022, with a daily manufacturing capacity of 69 tonnes in rubber weight. The company is also working on the second phase of expansion, expected to begin by 2024, increasing the daily capacity to 132 tons.
- All these factors are expected to keep the demand for carbon black in India robust from the tire industry.
