News from Notch Consulting, Inc.

January 17, 2008

Evonik Raises Prices for Pigment Blacks in Europe

Filed under: Carbon Black — Notch @ 10:42 am

Evonik’s Inorganic Materials segment has announced a price increase for pigment blacks and Acematt matting agents. The price increase for pigment blacks will be effective for deliveries in Europe from February 1, 2008. The release states, “Manufacturing costs of pigment blacks have been increasing continuously for some time, and feedstock costs are now at an all-time high. Evonik has taken all conceivable steps to offset these rising costs. However, these measures no longer suffice to absorb cost increases, which must now be passed on in part to all customers.” The release did not provide specific details on the amount of the increase.

January 16, 2008

Notch Updates World Thermal Black Report

Filed under: Carbon Black — Notch @ 2:40 pm

Notch Consulting has just published an update of World Thermal Black, which covers the global market for thermal black, a type of large particle, non-reinforcing carbon black manufactured from natural gas feedstocks. The previous edition of this report was published in August 2005. The report provides demand for thermal black by region, market and type (medium and fine) for all years from 2003 through 2007, with forecasts provided for 2008, 2009, 2010, and 2015. An overview and full table of contents for the report can be found here.

I have previously written on this blog about recent activities at thermal black producers Cancarb and Severgazprom.

After several challenging years that saw one major supplier (Sevalco) exit the market, conditions in the thermal black industry improved in 2006-2007 as volume demand grew and natural gas prices moderated from extreme highs in late 2005. From a high of more than $13 per MMBtu (Henry Hub, wellhead price) in 4Q 2005, natural gas prices fell back into the $5 to $7 per MMBtu range for most of 2006 and 2007, which improved margins since suppliers were eating at least some of the higher feedstock costs. Utilization rates improved with Sevalco’s exit, such that one leading producer is now considering adding more capacity. Future growth in thermal black depends on greater penetration of the Asian market. Given that thermal black tends to be used in higher quality goods, demand should benefit as rubber compounders in Asia strive to raise quality to meet global standards.

Request for Information: Notch has heard a rumor that a new company is evaluating a thermal black plant in Asia. If anyone has information on this project, write to me at info AT notchconsulting DOT com.

January 13, 2008

Evonik Restructures Chemicals Business

Filed under: Carbon Black, Silica — Notch @ 6:24 pm

On December 10, 2007, Evonik Industries announced a new organizational structure for its chemicals business, Evonik Degussa GmbH. Under the restructuring, the business’s twelve current Chemical Business Units will be consolidated into six units.

• C4 Chemistry and Building Blocks will become Base Chemicals (headed by Dr Thomas Haeberle);
• Aerosil & Silanes and Advanced Fillers & Pigments will become Inorganic Materials (headed by Thomas Hermann);
• Care & Surface Specialties and Superabsorber will become Consumer Specialties (headed by Dr Claus Rettig);
• Feed Additives and Exclusive Synthesis & Catalysts will become Health & Nutrition (headed by Dr Hubert Wennemer);
• Coatings & Colorants and Specialty Acrylics will become Coatings & Additives (headed by Dr Hans-Peter Schaufler, to be succeeded by Dr Ulrich Küsthardt at a later point);
• High Performance Polymers and Methacrylates will become Performance Polymers (headed by Gregor Hetzke).

A press release on the restructuring is here.

An overview of the Aerosil & Silanes business is here. An overview of the Advanced Fillers & Pigments business is here.

The new Inorganic Materials business unit will include the following products:

• From Advanced Fillers & Pigments: carbon black, precipitated silica, rubber silanes, matting agents, iron blue pigments, Inxel pigment preparations;

• From Aerosil & Silanes: fumed silica (Aerosil), functional silanes, chlorine silanes, and Degussa Advanced Nanomaterials (nano-structured materials such as zinc oxide, indium zinc oxide and ceroxide).

The restructuring makes sense in that it brings together rubber silanes and functional silanes into the same business unit. Similarly, the new structure brings together precipitated silica and fumed silica, which share some applications.

    January 11, 2008

    Yokohama Rolling Out Advan ZPS Run-Flats in NA and Europe

    Filed under: Run-flats, Tires — Notch @ 2:09 pm

    Yokohama Rubber introduced its Advan ZPS (Zero Pressure System) run-flat tires in Japan in December 2006 and is rolling out the tires in North America and Europe in 2008. The Advan ZPS, the first run-flat in the Advan line-up, is based on self-supporting technology (i.e., it relies on reinforced sidewalls rather than a support ring). It is designed to run 50 miles at 55 mph at zero pressure.

    The Advan ZPS line was introduced at the 77th Geneva Motor Show in March 2007. Yokohama’s press release on the show is here.

    Yokohama exhibited the Advan ZPS at SEMA 2007, held last November in Las Vegas. According to, the Advan ZPS will be available in 2008 in the US in 13 sizes. Yokohama already offers AVS Sport Run Flats in the US, including two sizes designed specifically for the Corvette C5.

    Yokohama is also exhibiting the Advan ZPS at this year’s Autosport International show being held now (January 10-11) in Birmingham, UK. According to Tyres & Accessories magazine, the tires will be available in the UK beginning around the middle of 2008.

    In February 2007, Notch Consulting published Prospects for Run-Flat Tires, which covers the global market for run-flats.

    January 10, 2008

    Birlas to Raise Stake by 11 Percent; Expands Carbon Black Business

    Filed under: Carbon Black — Notch @ 10:59 am

    According to an article in the Hindustan Times, the Birlas plan to raise their stake in Aditya Bira Group by 11% to 50% through a proposed preferential allotment. The plan will pump Rs 4,200 crore (US$1.8 billion) into the company, which will be used by Aditya Birla Nuvo to fund expansions in its various businesses. The company will hold a meeting on February 6 to obtain approval for the proposal.

    Garments, carbon black and insurance would take a major slice of the proposed investments. The insurance business, for instance, is expanding its distribution network. Madura Garments is setting up new showrooms across the country. This requires an investment of Rs 500 crore. One more plant is being set up at Patalganga for the carbon black project at an estimated investment of Rs 300 crore.

    (Emphasis mine.)

    Back in September 2007, Birla detailed an ambitious expansion program for its carbon black business in an article in The Economic Times. The program includes the new plant in India (Patalganga), which will be further expanded in coming years, as well as doubling current capacities in both China and India. The program also includes the proposed plant in Mexico.

    January 4, 2008

    Goodyear Ends Tire Production at Tyler — What Effect on Raw Material Demand?

    Filed under: Carbon Black, Rubber Chemicals, Silica, Tire Cord, Tires — Notch @ 4:54 pm

    According to Rubber & Plastic News, Goodyear ceased tire production at its Tyler, Texas plant on December 21, 2007. The closure reflects Goodyear’s plan to reduce production of private label passenger tires, which are under intense pricing pressure due to low cost imports. Goodyear officially announced the closure in October 2006, three weeks after about 12,600 workers went on strike at Tyler and 12 other Goodyear tire and engineered products plants. The strike — prompted in part by plans to close Tyler and possibly other plants — was called by the United Steelworkers on October 5, 2006 and was settled on December 22, 2006. As part of the settlement, Tyler’s closure was delayed from mid-2007 and another plant in Valleyfield, Quebec will be closed in 2008. The closure affected 600-650 jobs, either through layoffs, retirements or transfers to other plants. Some production is being moved to other plants, and Tyler will continue to operate a rubber mixing unit, which employs 135 workers. The plant had a daily capacity of 26,000 passenger and light truck tires.

    According to Notch Consulting estimates, the Tyler plant running at full capacity used about 25 KT of carbon black per year (including about 8-10 KT carcass grades and 16-18 KT tread grades), about 2-3 KT of rubber chemicals (evenly divided between antidegradants and accelerators), and about 5 KT of textile reinforcements (primarily HMLS polyester). According to a silica supplier, Tyler did not use silica in its mix. Not all of this demand will be removed from the market, as some production is being moved to other Goodyear sites and Tyler continues to run a mixing unit. All in all, Notch estimates that shut-down will result in about half of this demand being lost.

    January 3, 2008

    Huber Announces Price Increase for Silica and Silicates

    Filed under: Silica — Notch @ 11:50 am

    On January 2, 2008, Huber Engineered Materials announced a price increase for its specialty grade silica and silicates. The increase will take effect on February 1, 2008 or as contracts allow. Prices will increase an average of 5% to 8%. The increase was attributed to higher energy, raw material and regulatory costs.

    Here is the press release.

    January 2, 2008

    Performance Fibers Agrees to Acquire INVISTA’s North American Tire Cord Business

    Filed under: Tire Cord — Notch @ 11:17 pm

    Here’s one that got lost in the holiday shuffle. On December 3, 2007, Performance Fibers announced it had signed a definitive agreement to acquire INVISTA‘s North American tire cord and polyester industrial filament business. The deal includes INVISTA’s manufacturing plants in Salisbury, N.C., Shelby, N.C., and Winnsboro, S.C., as well as industrial polyester, industrial nylon 6, and tire cord fabric-producing assets currently operating at INVISTA’s site in Querétaro, Mexico. The deal was signed on November 30, 2007. Terms were not announced.

    The acquired business includes industrial polyester and nylon 6 fibers used in tire cord as well as belting, sewing thread, auto safety, and rope, cordage and netting. The deal does not include INVISTA’s PET resin business and its contract manufacturing operations for fine denier staple, both based in Querétaro.

    This is the second deal Performance Fibers has made with INVISTA. In August 2006, Performance Fibers acquired INVISTA Resins and Fibers GmbH’s German polyester yarn business. The deal included plants in Bad Hersfeld, Bobingen, and Guben, Germany.

    Here is the press release from Performance Fibers.


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