In the latter half of March 2024, stearic acid witnessed a roughly two percent uptick in the Indian market. Taking note of the situation, the government launched an anti-dumping investigation into chemical imports utilized in the rubber industry, originating from China and Japan.
The investigation follows a complaint filed by Oriental Carbon & Chemicals Limited. The Directorate General of Trade Remedies (DGTR), under the commerce ministry, is scrutinizing the alleged dumping of ‘insoluble sulphur’. This occurs amidst uncertainties surrounding the trade of stearic acid (rubber grade), which holds significant importance in the tyre industry.
The Solvent Extractor Association (SEA) of India highlighted challenges faced by the domestic oleochemical industry due to substantial imports of finished products, such as stearic acid, refined glycerin, soap noodles, and oleic acid from Southeast Asian nations at zero duty. The association has urged the government to categorize these items as restricted.
According to the Indian Department of Commerce (IDC), stearic acid imports have witnessed a year-on-year increase from 58,93,800 tons in 2022 to 68,88,460 tons in 2023. Currently, the domestic oleochemical industry, including domestic stearic acid production, confronts a significant existential threat due to the escalating importation of finished products, majorly sourced from exporting Southeast Asian markets like Thailand, Malaysia, and Indonesia at no duty.
As reported by ChemAnalyst, the demand for stearic acid is anticipated to surge in April as weather conditions change, leading to heightened consumption. Notably, the FMCG industry has observed volume growth in the first quarter of this year, fuelled by narrowing gaps in rural and urban consumption. Additionally, an anticipated decrease in inflation rates in March 2024 is expected to further stimulate purchasing activities among the populace.
