Carbon black is a key input used in the manufacture of automotive tyres.
Close to 70 per cent of the production is consumed by the tyre industry, while mechanical rubber goods account for about 18 per cent of the demand. The carbon black offtake, therefore, hinges on the trend in tyre production. After a sharp rise during 1999-2000, the automotive tyre production declined steadily in the previous fiscal. This has affected the demand for carbon black. However, the price hike effected by carbon black producers in the previous fiscal was in response to the sharp spurt in input costs.