News from Notch Consulting, Inc.

June 29, 2008

Century Enka Urges Anti-Dumping Fees Against Nylon Tire Cord

Filed under: Tire Cord — Notch @ 2:17 pm

According to Calcutta’s The Telegraph, two Indian producers of nylon tire cord, Century Enka and SRF Ltd., have petitioned for the imposition of anti-dumping duties on imports of nylon tire cord from Belarus into India.

Century Enka (Calcutta, India), a joint venture between BK Birla Group and Accords, is a leading Indian producer of textile fibers, including tire cord. The company reported that its profitability in nylon tire cord stumbled last year as the company was forced to reduce prices in response to imports. BK Birla has indicated that it will not invest further in Century Enka unless the company’s results improve. SRF Ltd. (Haryana, India) produces specialty chemicals, polymers, and textiles, and is India’s leading producer of nylon tire yarn and cord.

Several years ago, Century and SRF successfully lobbied for action against Chinese imports of nyon tire cord, resulting in an anti-dumping duty of Rs 51 per tonne.

Supreme Court Rejects Appeal of Continental Carbon Phenix City Decision

Filed under: Carbon Black — Tags: , , — Notch @ 11:52 am

On Friday, June 27, 2008, the United States Supreme Court rejected all further appeals of punitive damages in a nearly 4-year-old ruling against Continental Carbon Company (Houston, Texas) and its parent company, China Synthetic Rubber Corp. (Taipei, Taiwan) regarding air emissions from Concarb’s carbon black plant in Phenix City, Alabama.

In 2004, a federal jury handed down a $20.7 million verdict in favor of four plaintiffs, including the city of Columbus, Georgia, local boat dealer John Tharpe, and South Columbus resident Owen Ditchfield against Concarb and CSRC. According to the verdict, emissions of airborne carbon black particles from the Phenix City plant caused property damage in the city of Columbus, Georgia, which is just across the Chattahoochee River from the plant. The $20.7 million verdict included $3.2 million in compensatory damages and court costs and $17.5 million in punitive damages.

Continental appealed the decision, but on March 21, 2007 a three-judge panel at the US Court of Appeals, 11th Circuit in Atlanta, Georgia upheld the verdict. On April 11, 2007, Continental filed a petition for a rehearing of the appeals court decision on the grounds that the punitive damages of $17.5 million were excessive. In late May 2007, the US Court of Appeals refused Continental’s request to rehear its own decision in the case. Continental paid the compensatory damages and court costs in June 2007, but appealed the $17.5 million in punitive damages to the US Supreme Court, which on Friday refused to hear the appeal.

On Friday, Continental Carbon’s president Kim K.T. Pan released a statement indicating that the company will pay the $17.5 million punitive damage judgement in accordance with the ruling.

Here is an Associated Press article on the decision.
Here is Continental Carbon Company’s statement on the decision.

June 26, 2008

Diolen Raises Prices, Introduces Indexed Pricing

Filed under: Tire Cord — Tags: , , — Notch @ 5:27 pm

According to European Rubber Journal (subscription required), Diolen Industrial Fibers has announced a price increase of 10% for all of its products effective August 1, 2008. In a letter to customers, the company cited “steep and ongoing cost increases in main raw materials, energy, auxiliaries, packaging materials and transportation.” Diolen also indicated that it will begin to implement indexed pricing linked to raw materials costs and crude oil prices.

Diolen Industrial Fibers is a leading European producer of high tenacity polyester-based industrial yarns, including tire yarns, with factories in Germany and the Netherlands. In January 2008, Diolen was acquired by Traction Partners of Amsterdam.

Butadiene Shortage Prompts Cooper to Curtail North American Production

Filed under: General, Tires — Notch @ 5:06 pm

For the last month or so, I’ve been hearing reports that a shortage of butadiene was causing sporadic supply problems in SBR and BR, causing several temporary shutdowns at US tire plants.

On Monday, June 23, 2008, Cooper Tire & Rubber announced that it has reduced production at its North American facilities during the second quarter to counter decreased demand and projected shortages of certain raw materials. The production curtailments during the second quarter will cost in the estimated range of $12 million to $14 million. Cooper did not disclose the depth of the production cuts, the product lines or facilities affected, the length of the curtailment, or whether the moves would result in worker layoffs.

On Tuesday, Tire Business (subscription required) reported that, according to a Cooper spokesman, the curtailment was prompted by shortages of synthetic rubber (caused by a butadiene shortage), along with reduced demand.

Bridgestone Ad for Run-Flats

Filed under: Run-flats — Notch @ 4:33 pm

From the blog comes an astute analysis of a two-page Bridgestone ad for run-flat tires that appeared in Wired magazine.

The headline on the left ad reads:

This doesn’t tell me much about Run-Flat tires. How do they keep drivers in control? In control of what?

To answer this question, I’m supposed to read the copy on the page, which I’m not going to do, because:

1. I’m busy.
2. The ad isn’t compelling.
3. I’m not all that interested in tires.

Bridgestone thinks that I have nothing better to do than to read through all the features of their new tires. They’re wrong. If I don’t read the copy, I won’t find out what Run-Flat tires are.

As I’ve said previously, I’m not convinced that the tire industry has figured out how to sell these products to a disinterested public. Early adopters are all over them but for everyone else it’s huh? what?

Columbian Adjusts Carbon Black Surcharge, Moves from Quarterly to Monthly Contracts

Filed under: Carbon Black — Tags: , , — Notch @ 3:54 pm

On Monday, June 23, Columbian Chemicals issued a press release announcing an adjustment to its previously announced program to add a surcharge to all carbon black products shipped in North America.

The previously announced surcharge of $0.08 per pound, which was implemented on June 1, 2008, will be reduced to $0.06 per pound effective July 1, 2008. Though the surcharge will be reduced, prices will not actually fall, since the surcharge reduction is occurring in tandem with the normal quarterly price adjustment initiated with the beginning of the new quarter on July 1. The surcharge was introduced to close the lag between contract feedstock adjusters (which are determined by the previous quarter’s average price) and actual current feedstock costs. The surcharge will be reviewed again in late July and adjusted accordingly for the month of August.

Columbian also announced that it will move all of its contracts from a quarterly to a monthly price adjustment mechanism to more accurately reflect the rapid changes in raw material costs. Under this monthly mechanism, feedstock price changes — both increases and decreases — will be passed through to the customer the following month. According to the announcement, “The “quarter-lag” is no longer workable in today’s environment.”

Below is a copy of the press release.

Potential New Source of Carbon Black

Filed under: Carbon Black — Tags: — Notch @ 2:58 pm

This article caught my eye.

The president and CEO of Atlantic Hydrogen Inc. is floating on air after an announcement Tuesday that his company is receiving millions of dollars in private and public funding.

David Wagner said the money will be used to fund a three-year $10-million demonstration project of the company’s CarbonSaver, a plasma technology that produces hydrogen and removes carbon from natural gas.

The article implies that the carbon removed from the gas stream would be in usable form.

Wagner said what makes his company’s technology unique is that it works in line with existing natural gas infrastructure and doesn’t release greenhouse gas.

“There are many technologies that remove hydrogen from natural gas but ours does it without generating greenhouse gases,” Wagner said. “We remove carbon in a solid form.”

The technology once streamlined and commercialized is expected to be used in operations such as power plants, compressors, natural gas vehicle refueling, as well as for home and commercial heating.

No idea what the specs on a product like this would be. The company’s website indicates the process “generates a solid that is high purity carbon without generating GHG emissions.” Here is an excerpt from the company’s website on the carbon black created by the process.

An initial evaluation demonstrates the potential of value-added carbons with a high surface (greater than 200m2/g) with highly branched aggregates and graphic sheets. If confirmed, the possible uses include carbon for composite fillers, structural reinforcement, enhanced conductivity and increased durability. Also the carbon’s low polyaromatic hydrocarbons (PAHs) and high-purity may mean that it meets stringent pharmaceutical and food grade specifications. At current market rates, carbon black trades in the range of $0.30 to $0.60 per pound. Preliminary analysis by Dr. Felipe Chibante (University of New Brunswick), suggests that AHI carbon could fetch a three to ten time premium over most carbon black produced today.

Cleanup Continues on Illinois Carbon Black Spill

Filed under: Carbon Black — Tags: , , — Notch @ 2:35 pm

In a post from last week, I wrote about a carbon black spill in Hancock County, Illinois. On Tuesday, the Hancock County Journal-Pilot published an excellent article on the original spill and on cleanup efforts, which continue.

Clean-up was started where the spill began, the intersection of rts. 9 and 94. A semi truck and trailer belonging to Chandler Transportation, Inc. of Monmouth struck a barrier on Friday, June 13, at the intersection’s construction site, causing two of the three compartments within the box trailer to crack open and begin spilling carbon black onto the roadway, according to an investigation by the Illinois Environmental Protection Agency.

The largest pile of carbon black at the intersection was 10,000 pounds. Clean-up in the first 100 yards of highway netted 5,000 pounds of carbon black.

In my original post, I noted that there was some initial disagreement about the size of the spill, with estimates ranging from 1 ton to 15 tons. It’s obvious from this article that the reality is closer to 15 tons, or 30,000 pounds. According to the article, the Illinois EPA may take action against the trucking company for violations of the Illinois Environmental Protection Act.

Goodyear to Close Australian Tire Plant

Filed under: Carbon Black, General, Rubber Chemicals, Tires — Tags: , , — Notch @ 12:06 pm

On Wednesday, Goodyear Tire & Rubber announced plans to close its tire plant in Somerton, Victoria, Australia by the end of 2008. The plant operates as South Pacific Tires and was built in 1961. In 1987, the plant was formed as a joint venture, but has been wholly owned by Goodyear since 2006. About 600 employees will be affected. The move is expected to remove about 3 million units per year of capacity and result in annual cost savings of $35 million. According to Goodyear CEO Robert Keegan, the closure will complete Goodyear’s plan to reduce high-cost capacity by about 25 million units and achieve annual cost savings of more than $150 million.

This move will remove roughly half of Australia’s current tire production capacity. After the closure, Australia will have one tire plant, Bridgestone’s facility in Salisbury, South Australia.

The main text of Goodyear’s press release is below.

The Goodyear Tire & Rubber Company today announced plans to close its Australian manufacturing facility as part of its strategy to reduce high-cost manufacturing capacity globally and provide cost effective high-value-added products that the market is demanding.

This action will eliminate approximately 3 million units of high-cost capacity and provide Goodyear with annual cost savings of approximately $35 million.

“This completes our commitment to reduce high-cost capacity by about 25 million units and achieve annual cost savings of more than $150 million,” said Goodyear Chairman and Chief Executive Officer Robert J. Keegan. “Going forward, our efforts will be focused on increasing production of high-value-added tires in low-cost operations to support growth in these segments in Asia-Pacific markets, including Australia and New Zealand.”

South Pacific Tyres (SPT) will immediately initiate communications with its 600 associates and union representatives regarding the plan to close the plant in Somerton, Victoria by Dec. 31, 2008.

“Goodyear and South Pacific Tyres remain committed to their customers and a strong and ongoing product, retail and wholesale presence in Australia,” said SPT Chief Executive Officer Judith Swales.

Total restructuring and accelerated depreciation charges for this action are estimated to be approximately $125 million after tax, of which approximately $85 million is for cash charges. Goodyear anticipates recording charges of approximately $75 million after tax in the second quarter of 2008.

Formed in 1987 as a joint venture, SPT has been wholly owned by Goodyear since 2006. The leading tire maker and marketer in Australia, it has more than 3,000 associates. Its results have been consolidated with those of Goodyear’s Asia Pacific region since 2004.

Chemtura Raises Rubber Chemical Prices

Filed under: Rubber Chemicals — Tags: , , — Notch @ 11:22 am

Chemtura announced on Wednesday that it plans to raise prices on a its range of polymer additives used primarily in the rubber industry, effective July 15, 2008, or as contracts allow. The increases range from $0.10-$1.10 per kilogram, and come in response to higher raw material, energy, and transportation costs.

From Chemtura’s press release:



Amine antioxidants 1

$0.15 – $0.60/kg

Polyol stabilizers 2

$0.20 – $0.25/kg

Lowinox(R) CPL


Sunproof(R) Waxes


Naugard(R) 445


All other products 3

$0.10 -$0.50/kg

1 Includes Aminox® BLE ®25, BLE® 65, BLE® 70, BLE® 75, Flexzone® 4L, Naugard®Q, Novazone® AS, Octamine®

2 Includes Naugard® PS30, Naugard® PS48 and Naugard® PS4830

3 Includes BIK OT®, Bonding Agent P-1, Hepteen Base®, Naugawhite®, Opex 80®, Royalac® 150 and Trimene Base®.

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