News from Notch Consulting, Inc.

Tokai Carbon CB will raise prices on all grades of carbon black in North America by $0.20/lb effective August 1, 2022. The company said the price increase is necessary to pay higher operating costs associated with ongoing investment in equipment to meet increasingly rigorous environmental standards and higher operating expenses required to ensure continuity and increase overall reliability for customers.

On May 25, Orion Engineered Carbons announced that it will complete its gas black expansion in Germany at plants in Dortmund and Cologne by early 2023. Orion is the only carbon black producer in the industry with gas black capabilities. Gas blacks, known for excellent dispersion and coloristics, are used in coatings, printing ink and other applications.

“The expansion in Germany is core to our strategy to further strengthen our leadership in the premium specialty market,” Sandra Niewiem, senior vice president of global specialty carbon black and the EMEA region, said in a press release. “As we experience continuous high demand for gas blacks, we are confident that the extra capacity will be welcomed by our customers.”

Earlier this month, Orion announced plans to build the only plant in the U.S. producing acetylene black, a conductive carbon black used in lithium-ion batteries, high-voltage cables and other products powering the global transition to electrification and renewable energy. The factory will be located in La Porte, Texas, south of Houston, and will be will be backed by a long-term agreement for acetylene supplied from a neighboring site owned by Equistar Chemicals LP, a subsidiary of LyondellBasell.

Acetylene is a colorless gas widely used as a chemical building block. Orion’s production process turns acetylene into a powder, which is added to lithium-ion batteries to enhance electrical conductivity. The material plays a similar role in high-voltage cables used for wind and solar farms.

Orion will invest between $120 million to $140 million in the facility, expected to start up in the second half of 2024. This investment should increase the company’s conductive additives capacity by approximately 12 kilotons per year.

“With this investment, we will quadruple our effective manufacturing capacity of acetylene-based conductive additives,” Corning Painter, Orion’s CEO, said in a press release. “We are already experiencing high demand for this material, so expanding capacity for it is one of our top investment priorities and a major milestone in our growth plans. This is a very big day for Orion.”

The company, which has a similar plant in France with locally supplied acetylene gas from LyondellBasell, is the sole producer of acetylene-based conductive additives in the European Union. Demand for battery additives is expected to grow rapidly amid a global boom in the construction of gigafactories making lithium-ion batteries.The plant will have a favorable environmental profile and will be subject to obtaining the routine regulatory approvals.

Birla Carbon today announced a 15% price increase for all carbon black products manufactured in North America, effective July 1, 2022. All shipments made on or after this date are subject to the price increase.

Increasing costs in materials, freight, logistics, and operations are the key reasons for this necessary change.

Orion Engineered Carbons announced today it aspires to align its sustainability objectives with the Paris Climate Agreement and strive to achieve net-zero emissions of greenhouse gases by 2050. To meet this goal, Orion has developed a roadmap with near- and long-term targets. These targets include:

• • Launch a broad range of products using recycled materials by 2025
  • Enlarge the company’s footprint in the conductive additives space by 2025, including materials used in lithium-ion batteries for electric vehicles and other applications critical for the transition toward electric power
  • Grow the sustainable solutions’ share of adjusted EBITDA to 30% by 2030 and 50% by 2035
  • Set new aspirational mid-term goals for greenhouse-gas emissions reduction that are aligned with science-based methodologies

In a press release announcing the program, Orion CEO Corning Painter said, “We know our goal is ambitious and we want to make sure it’s meaningful. Like most companies, we can’t say we have all the answers now. But we’re determined to work hard to find sustainable solutions with collaboration, innovation and the right regulatory environment.”

On Monday, March 7, Orion Engineered Carbons issued a statement on the conflict in Ukraine. The statement is presented in its entirety below.

How are natural gas prices in Europe impacting your business?

On a net basis, our business in Europe is facing an overall manageable headwind from current energy pricing developments. We have hedging programs in place and for our formula and nonformula customers, natural gas costs are part of our pricing negotiations.

Do you have assets in Russia or Ukraine?

No. We do not have any direct risk exposure in Russia or Ukraine.

Do you import Carbon Black Oil as feedstock from Russia?

No, we do not.

How much of your business in Europe is spot versus contracted?

Spot is less than ten percent of our business in Europe.

Do you have any capacity available for customers who need to move their business from Russia or Ukraine to Europe?

Our capacity remains tight in Europe. However, our new production line in Ravenna Italy was recently commissioned which adds capacity to the region and the line should be filled sooner than anticipated.

Do you have Ukrainian or Russian customers which you no longer deliver to?

Historically, Orion’s business activities in Ukraine and Russia have been very limited. Our few Russian customers have been informed that deliveries to them have been discontinued.

ERJ reports that Orion Engineered Carbons is commissioning a new 25,000 ton/year reactor for speciality and technical rubber carbon black production at its facility in Ravenna, Italy. The plant will start operations the first week of March and will serve primarily the European market. Additional investments at the 60-year-old plant include a new co-generation facility to convert waste heat into electricity, generating up to 120 MWh of green electricity per year. Roughly 7% of the power generated at the plant will be supplied to the national grid.

The article states that the facility in Italy marks the first new reactor for carbon black production in the European Union in over 40 years. This statement is technically correct, but it should be noted that in 1994 two new carbon black plants started up in Europe: a Cabot factory in Valasske Mezirici, Czech Republic and a Columbian Chemicals factory in Tiszaújváros, Hungary. Neither the Czech Republic nor Hungary were members of the European Union at the time — both countries joined in 2004. Both of these plants have been expanded since they were built: CS Cabot in the Czech Republic was expanded 1996 and 2002, while the Columbian factory in Hungary was expanded in 2008 and 2012. The Hungary plant is now part of Birla Carbon and recently celebrated its 25-year anniversary.