News from Notch Consulting, Inc.

December 17, 2008

Dow Closing EPDM Plant

Filed under: Carbon Black, General — Notch @ 2:10 pm

Last week, Rubber & Plastics News (subscription required) reported that Dow Chemical was planning to shut down its EPDM rubber plant in Seadrift, Texas, according to a company SEC filing. The move is part of a company-wide restructuring that will involve the closure of 20 plants, the temporary idling of 180 more plants, and the divestiture of non-core businesses. The Seadrift plant manufactures Nordel-brand EPDM with an annual capacity of 110,000 tonnes. Dow also operates an EPDM plant in Plaquemine, La., with capacity of 100,000 tonnes.

One little known fact about the Seadrift EPDM plant is that it actually was a significant consumer of carbon black, with annual demand in the range of perhaps 20 KT. This is because the plant was selling a type of EPDM masterbatch with carbon black premixed into the compound to ease processing. According to my sources, these quantities will not necessarily be removed from the market, but the closure of the plant will move these purchases from one centralized customer (and one primary carbon black supplier) to many diffuse customers, as compounders and MRG customers will now be forced to do their own mixing, since the Plaquemine EPDM plant sells conventional material, not premixed.

European Car Sales Down by 26% in Nov

Filed under: General, Tires — Notch @ 11:18 am

The European Automobile Manufacturers’ Association, ACEA, has reported that new passenger car registrations in Europe (encompassing the EU 27 and EFTA countries) fell by 25.8% in November compared to the same month of last year, declining for the seventh month in a row, mirroring the financial and economic crises. The last time registrations dropped this significantly was in 1999 and 1993, though data then included only the EU15 plus EFTA countries. Markets in Western Europe and the new EU Member States contracted at a similar pace (-26.0% and -22.6% respectively). All markets decreased except Finland, Poland and the Czech Republic. Ireland and Romania both saw registrations fall by more than 50% in November compared to a year ago, while Spain saw registrations fall by 49.6% and the UK by 36.8%.

January to November results show a 7.6% decline of the West European market, with around one million fewer cars registered compared to the same period last year. France managed to level last year’s demand so far (+0.8%), while registrations in Germany declined by 1.5%, in the UK by 10.7%, in Italy by 13.4% and in Spain by 26.0%.

Markets in the new EU Member States echoed the November drop recorded in Western Europe, plummeting by 22.6%, and against the trend so far. The new EU Member States long showed more resilience, in relative terms, because of the greater number of first-time buyers as opposed to the replacement market of Western Europe. Of the main markets, the Czech Republic (+2.0%) and Poland (+10.7%) posted growth, compensating the negative results recorded in Hungary (-28.4%) and Romania (-53.1%). Eleven months into the year, the region posted growth with 0.3% more cars registered than over the same period a year earlier. Hungary and Romania saw their new registrations go down by 7.4% and 7.5% but the Czech Republic and Poland performed better than last year with a 9.3% upturn.

Cooper to Close Georgia Tire Plant

Filed under: General, Tires — Notch @ 10:27 am

On December 17, 2008, Cooper Tire and Rubber announced that it planned to close its tire plant in Albany, Georgia by the end of 2009. Operations at the plant will wind down over the next twelve months as production is moved to other plants or shut down entirely. The facility was acquired by Cooper in 1990 and employs approximately 1,400. The plant has a capacity of 22,700 units/day for passenger and light truck tires, or about 20% of Cooper’s total US capacity. It is not clear from the initial announcement what the net reduction in Cooper’s US capacity will be. Cooper intends to realign the mix of products at its remaining U.S facilities located in Findlay, Ohio, Texarkana, Ark., and Tupelo, Miss., to meet customer demand. Notch estimates that the Albany plant consumed 16-20 KT of carbon black per year, but, again, it’s not clear how much of this demand will be removed as opposed to shifted to other plants.

Here is the press release.

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