The Chinese carbon black market is marred by excessive capacity and internal price wars that put tyre makers across the world at risk. Indian producers seek to capitalise on the opportunity with reliable supply and quality.

The Asia-Pacific region dominates the global carbon black industry with an estimated 57.84 percent market share in 2023, according to a report by Fortune Business Insights. While China leads as the top exporter of carbon black from the region, India is gradually climbing the ranks with producers ramping up capacities in the wake of emerging markets such as North America.

Moreover, excessive capacity and internal price war is driving the Chinese carbon industry into a downward spiral with India vying to take its place leveraging quality and reliable supply chain.

Speaking on the tussle between the industry in these two countries on the sidelines of the 15th Asia- Pacific Carbon Black Conference, Group Country Head – Expansion Projects Asia – at Birla Carbon, Sanjeev Sood, told Tyre Trends, “China, with its surplus capacity in carbon black, often resorts to aggressive exports, especially to Southeast Asia. However, industry observers question the long-term sustainability of this model. The Chinese pricing mechanism is unsustainable. In today’s market, sustainability – whether in pricing or supply chains – is paramount. The question is not just about achieving results today but maintaining them over time.”

“The carbon black industry in China also faces credibility challenges. Instances of supply failures due to sudden price shifts have left global tyre manufacturers vulnerable. In contrast, Indian suppliers prioritise moral obligations and reliability. Our customers’ operations depend on us and we deliver, come what may,” the executive emphasised.

He also noted that China’s overcapacity has triggered intense price wars domestically, often spilling into export markets. However, Indian manufacturers remain largely insulated. Still, the broader implications of overcapacity, including margin pressures and supply chain disruptions, remain areas of concern for the global industry.

“As the sector navigates these challenges, the indispensability of carbon black remains clear, but the strategic positioning of reliable suppliers may increasingly define the competitive landscape,” he noted.

The rise in production by Indian carbon black manufacturers has drawn attention across the industry. Alluding to how this influences global markets, he noted, “It all boils down to the value you create. The value you provide to your organisation, your product and ultimately to your customers. If that core objective is met, there’s no reason to view increased production as a threat.”

“Rather than a race to expand production volumes, the competition pivots on delivering superior quality, reliability and customer-centric solutions. For players prioritising these principles, aggressive production by competitors becomes less about rivalry and more about reinforcing market dynamics that reward excellence,” he added.

Birla Carbon is also establishing two greenfield plants in the wake of opportunities. However, details of the same were withheld by the executive.

SUSTAINABLE INPUTS

Birla Carbon has recently launched the Continua 8030 carbonaceous material to further its drive to offer sustainable materials to the industry. Alluding to how it has been received by tyre makers, Sood explained, “Continua 8030 has made significant strides in addressing one of the tyre industry’s most pressing challenges, which is incorporating sustainable, recycled materials without compromising performance. The push for circularity has placed tyre companies under immense scrutiny, with demands for sustainability now extending from raw material sourcing to ethical practices.”

“Tyre companies are now laser-focused on using recycled materials and ensuring environmental accountability. Continua 8030 has emerged as a pivotal solution with many customers already integrating it into their formulations and others in advanced testing stages. It’s been highly successful so far, and we believe it has the potential to revolutionise the carbon black industry,” the executive added.

While Continua 8030 aligns with sustainability goals, it isn’t a complete substitute for virgin carbon black. “Recycled carbon black isn’t 100 percent usable in formulations. Continua 8030 must be blended, depending on preferences and processes. The product’s primary advantage lies not in performance enhancement but in supporting sustainability objectives. It’s about how much of your product you can recirculate without compromising the tyre’s overall performance. The blend percentage and usage entirely dictate its effectiveness, but the focus remains on achieving sustainability without a negative performance impact,” averred Sood.

TACKLING SPEEDBUMPS

According to the industry veteran, market volatility remains the most significant challenge for businesses today, especially in industries like carbon black, where global dynamics heavily influence supply chains and costs.

“Geopolitical upheavals, such as the ongoing Israel-Middle East crisis or unforeseen shifts in logistics costs, exemplify the unpredictable nature of the current landscape. Who could have predicted just two months ago the steep surge in shipping rates? This is the reality we face,” he observed.

The key to thriving amidst such uncertainty lies in agility and foresight. “Volatility is inevitable, but how businesses respond makes all the difference. Companies must remain nimble and adapt quickly to align with emerging challenges. The ability to pivot proactively rather than reactively is what defines success,” said Sood.

As markets continue to evolve, businesses that embrace adaptability, plan for contingencies and foster resilience will stand out, turning challenges into opportunities for growth, highlighted the executive.

When asked about potential challenges, Birla Carbon remains unfazed. “We do not anticipate challenges we cannot handle. We are prepared for whatever the future holds,” the spokesperson stated, emphasising the company’s resilience and forward-looking strategies.

FORWARD PATH

The carbon black industry is on the cusp of a significant evolution as the automotive sector’s push for sustainable materials gains momentum. However, traditional and sustainable capacities are expected to co-exist and expand to meet growing demand.

Fresh capacities will continue to emerge alongside the increasing adoption of sustainable materials. As long as actual demand grows, the need for carbon black will persist, whether it’s used in conventional applications or innovative blends tailored to specific needs,” said Sood.

A key development in Birla Carbon’s arsenal is the Asia Post-Treatment Plant, the first of its kind in the region. Previously exclusive to the company’s US operations, this advanced technology is now available in Asia, marking a significant milestone.

“This plant isn’t for conventional carbon black but caters to highly specialised applications including paints, toners and speciality blacks. It represents a leap forward in high-end speciality products and demonstrates our commitment to innovation in meeting evolving market demands,” averred Sood.

With its robust capabilities and focus on innovation, the Indian carbon black industry is well-positioned to address the dual priorities of sustainability and performance in the automotive and broader industrial sectors. But how will it fare in its race against China is a matter left to the sands of time.

JK Tyre & Industries is aiming for double-digit revenue growth in FY2026, outpacing its forecast for single-digit expansion across the broader tyre industry. Managing Director Anshuman Singhania outlined the company’s ambitions during a post-earnings media call, underscoring confidence in demand recovery and strategic market positioning.

Q1 Performance Overview

For the first quarter of FY2026, JK Tyre reported revenue of INR 38.91 billion, with EBITDA at INR 4.24 billion, translating to a margin of 10 percent. Net profit stood at ₹1.55 billion — up 51 percent compared with the previous quarter, but down 21 percent YoY.

Singhania attributed the annual decline to muted original equipment (OE) demand, particularly in truck and bus radial (TBR) volumes, alongside higher raw material costs compared to the same period last year. He also highlighted an adverse impact from the company’s Tornel business in Mexico, which faced uncertainty due to tariffs on exports from Mexico to the United States, dampening volumes.

Resilience in Domestic and Export Markets

Dr Raghupati Singhania, Chairman and Managing Director, JK Tyre & Industries, said, “The growth momentum in domestic markets remained robust in Q1, with JK Tyre clocking a sales growth of 11 percent YoY, as contributed by a steady demand for our products in both replacement as well as OE segments, underscoring JK Tyre’s continued focus on core growth drivers and strengthening market presence.”

“Despite a challenging and uncertain macro-economic environment, exports of passenger car tyres witnessed a strong traction both on QoQ and YoY basis, signifying pull for our products and enhanced brand perception in the global markets,” said Dr Singhania.

Operational efficiencies and strategic pricing supported performance, even as natural rubber prices remained elevated. Subsidiaries Cavendish (India) and Tornel (Mexico) continued to contribute significantly to the group’s consolidated financials.

Operational efficiencies and strategic pricing supported performance, even as natural rubber prices remained elevated. Subsidiaries Cavendish (India) and Tornel (Mexico) continued to contribute significantly to the group’s consolidated financials.

Regarding trade tensions between India and the US, Anshuman Singhania noted that exports from India to the US account for only around 3 percent of JK Tyre’s revenue and could be redirected to markets such as Mexico, Latin America, Brazil and the UAE if required. With zero tariffs in Mexico, JK Tyre can utilise its production base there to meet demand for both passenger and truck radials. The EU and UK, where JK Tyre holds a strong position in the TBR segment, also remain tariff-free.

Capacity expansion

The company’s INR 14 billion capital expenditure plan is progressing on schedule, covering passenger car radial (PCR), TBR and all-steel truck radial projects. For the year, investment is expected to total INR 9-10 billion, aimed at boosting production capacity by 30-40 percent.

A key driver for future profitability is the shift towards premium products. The share of 16-inch and above passenger car tyres in JK Tyre’s portfolio has grown from 18 percent in FY2020 to 25 percent in FY2025, with a target of 40-45 percent over the next two to three years. This change is being fuelled by rising SUV sales, larger rim sizes in entry-level cars and strong export demand.

The company has also developed a complete range of tyres for electric vehicles, spanning commercial truck radials, bus tyres, passenger radials and two/three-wheeler tyres  Major OEMs such as Ashok Leyland’s Switch Mobility and Tata Motors are sourcing these products, including for last-mile connectivity vehicles and newly launched EV buses.

Market Outlook

The replacement market has been a bright spot, with passenger radial volumes up 32 percent year-on-year and truck radial volumes growing in the high single digits. JK Tyre expects demand to strengthen in the second half of FY2026, supported by infrastructure development, a favourable monsoon, potential interest rate cuts, and improved consumer liquidity.

Anshuman Singhania stressed that the worst of raw material price pressures appear to be over, paving the way for margin improvement as the product mix shifts and capacity utilisation rises. With the small car segment’s gradual decline offset by growth in premium categories, JK Tyre remains confident in sustaining momentum.

“Overall, India is poised for growth,” Singhania concluded. “We see positives across the board — from infrastructure push to evolving consumer preferences — and we are well-positioned to capitalise on these trends.”

Yokohama Rubber has begun supplying its ADVAN V61 tyres as original equipment for BYD’s new SEALION 6 DM-i SUV, marking the Japanese manufacturer’s first OE partnership with the Chinese carmaker.

The SEALION 6 DM-i, a plug-in hybrid SUV launched by BYD Company Ltd. this July, is being factory-fitted with 235/50R19 103V size ADVAN V61 tyres. The announcement comes as Yokohama seeks to grow its footprint in China’s fast-evolving electric and hybrid vehicle market.

The ADVAN V61 is part of Yokohama’s global flagship ADVAN range and is positioned as a premium SUV tyre. The company said the tyre “offers ADVAN’s hallmark premium-grade driving performance, along with a high-level balance of fuel and energy efficiency, handling stability, and quietness, achieving both comfortable city driving and long-distance touring for heavyweight SUVs.”

The SEALION 6 DM-i combines a 1.5-litre naturally aspirated petrol engine producing up to 74kW with an electric motor generating 160kW. Buyers can choose between 18.3 kWh and 26.6 kWh blade battery options, offering electric driving ranges of 93km and 130km, respectively. All models come equipped with advanced driver assistance systems as standard, and the exterior design draws inspiration from the concept of “ocean aesthetics.”

Sumitomo Rubber Industries Ltd said its subsidiary Dunlop Tyre Japan Ltd has completed a Japan Fair Trade Commission investigation into automotive all-season tyre sales after the regulator approved a commitment plan submitted by the unit.

The probe, which examined the subsidiary’s sales practices, concluded without the commission identifying any violation of Japan’s Antimonopoly Act, Sumitomo Rubber said in a statement.

Under Japan’s commitment procedures, companies can submit plans to address potential competition concerns without admitting wrongdoing, allowing them to resolve investigations while avoiding formal sanctions.

"We deeply apologise for the great trouble and anxiety that we have caused to all concerned, including our clients and business partners,” the tyre maker said.

Belgian steel wire maker Bekaert reported resilient first-half 2025 earnings as strong cash generation and cost control offset softer sales, but warned that tariffs and currency pressures are weighing on demand.

The company posted consolidated sales of €1.9 billion, down 5.2 percent year-on-year, with volumes declining 2.6 percent and price/mix effects stripping out a further 2.2 percent. Underlying EBIT slipped 16.2 percent to €171 million, delivering a margin of 8.8 percent compared with 9.9 percent a year earlier.

Free cash flow surged to €123 million from €43 million in the prior-year period, driven by a €135 million reduction in working capital and €21 million in cost savings as the company continued to streamline operations and rein in capex. Net debt fell to €327 million from €399 million despite a continuing €200 million share buyback programme, €74 million of which has been completed.

“We have continued to focus on what we can control best – cash flow and costs - and have significantly reduced overheads and working capital in H1 2025,” chief executive Yves Kerstens said. “Equally, I am very pleased with the hard work of our teams fighting for volumes in the current challenging markets.”

He added: “We are also taking further steps to make our business units more autonomous and agile. Therefore, I am very confident that we will come out of the current business environment stronger and more cost competitive than ever before.”

Bekaert said volumes were particularly strong in its Steel Wire Solutions and Rubber Reinforcement divisions in the United States and China, while European and Latin American demand lagged. Its Brazilian joint ventures delivered €24 million in net profit share, up from €20 million a year ago.

However, the group cautioned that growing trade tensions – including a rise in US steel tariffs from 25 percent to 50 percent – and the weakening of the US dollar and Chinese yuan against the euro were eroding pricing power and softening orders.

“Following a period of resilience in Q2, the tariff uncertainty and weakening economic outlook has started to have an impact on demand,” Bekaert said.

The company now expects slightly lower full-year 2025 sales on a like-for-like basis, with an underlying EBIT margin of between 8.0 percent and 8.5 percent, down from 8.8 percent in the first half.