MOSCOW (MRC) -- South Korean polybutadiene rubber (PBR) suppliers may consider alternative markets after New Delhi on July 13 announced a 10% import duty on the product originating from the country, reported S&P Global with reference to sources.
South Korea is one of India's largest suppliers of PBR, which mainly goes into tire manufacturing.
"We are discussing with traders [In India] what the next steps could possibly be," a South Korea-based producer said. "We need some time. But yes, we will have to look at other markets for export."
South Korea became one of the largest exporters of PBR to India, after a duty-free trade agreement, the Comprehensive Economic Partnership Agreement, took effect between the two countries on Jan 1, 2010. According to the agreement, South Korean PBR exports to India were duty free.
"It will definitely affect the businesses of South Korean suppliers because now they have to factor in the duty," a Gurgaon-based industry expert said. "But the question is whether there is sufficient domestic supply."
It will raise costs for Indian importers and tire manufacturers because some imports will still be needed, he said.
Reliance Industries Ltd is the only rubber manufacturer in India. The company had earlier told the Directorate General of Trade Remedies that PBR imports from South Korea were harming the local industry.
About 70%-80% of PBR produced in India goes into making tires. The rest is used as an additive to improve the mechanical strength of plastics such as polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS).
India's annual PBR consumption is around 180,000-190,000 mt, of which around 60%-63% is met through domestic suppliers, according to industry sources.
According to MRC's ScanPlast report, Russia's ABS output was 780 tonnes in May 2020. Production of Russian ABS plastics totalled 4,240 tonnes in January-May 2020, down by 17% year on year.
Polybutadiene (PBR) is a synthetic rubber. Polybutadiene has a high resistance to wear and is used especially in the manufacture of tires, which consumes about 70% of the production. Another 25% is used as an additive to improve the toughness (impact resistance) of plastics such as PS and ABS.