News from Notch Consulting, Inc.

May 14, 2009

Evonik Degussa Shuts Akron Technical Center

Filed under: Carbon Black, General — Notch @ 10:47 pm

Notch has learned that Evonik Degussa has shut its Akron, Ohio technical service center and research facilities and consolidated those functions into its technical centers in Piscataway, New Jersey and the Kalscheuren facility in Cologne, Germany. According to Evonik’s corporate website, the Akron office had 18 employees. The office served the Inorganic Materials business unit (formerly Advanced Fillers and Pigments).

A spokesperson for Evonik Degussa said of the closure decision, “While we confirm that we are moving our equipment, the consolidation move is by no means a sign of less commitment to the North American market. We are reinforcing and improving our technical service capability by pooling our analytical and non-rubber testing capabilities at Piscataway and our rubber work in Germany where substantial resources are available.”

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Continental Carbon Adds Conductive Blacks, Carbon Nanotubes to its Product Line

Filed under: Carbon Black — Notch @ 10:19 pm

Continental Carbon Co. has announced on its website that it is has expanded its product line beyond rubber blacks to include both conductive carbon black and carbon nanotubes (CNTs). According to the site, “carbon nanotubes and conductive carbon blacks represent the next generation of raw materials and are used across a wide range of industries ranging from electro-static thermal dissipation and shielding to composite material constructions.”

Notch understands that the carbon nanotube materials are currently being produced in lab quantities. When commercial-scale production is required, the materials most likely will be produced at Concarb’s Sunray, Texas plant, which has an idle pilot plant that would be modified to nanotube production.

Concarb’s position in carbon nanotubes is based on both internally developed technology as well as a recently announced partnership with a CNT company called Unidym, Inc. On May 12, 2009, Arrowhead Research Corporation, the parent company of Unidym, announced that it had entered into a partnership whereby Concarb will take over Unidym’s bulk CNT materials business. Under the agreement, Concarb will form a new subsidiary, Continental Carbon Nanotechnologies, Inc. (CCNI), that will exclusively supply Unidym with proprietary electronics-grade CNTs for its core markets and sell high quality CNTs directly into other, non-competing markets.

The transfer of assets will take place in two steps: the first involves the transfer of certain assets related to the materials business, including manufacturing equipment and select inventory; and the second will include the transfer of certain intellectual property and third party agreements necessary for the materials business as well as a supply agreement for CCNI to provide proprietary CNTs to Unidym.

According to the agreement, Unidym will continue to serve the electronics industry, including the touch-screen and LCD markets and, over the longer term, markets such as solar energy and printable electronics. Mark Tilley, CEO of Unidym, stated, “Continental Carbon’s global manufacturing operations and expertise will be an integral component of our go-to-market strategy. We expect that demand from the touch panel, LCD and solar markets will require a significant ramp-up of CNT capacity in the coming years.”

In the press release, Kim Pan, President of Continental Carbon, was quoted as saying, “We are pleased to join forces with Unidym and look forward to expanding the market for CNTs. We will work exclusively with Unidym to support Unidym’s transparent conductive films business, and expect to pursue several applications for these extraordinary materials beyond Unidym’s core markets.”

According to industry sources, Concarb’s new conductive black products are also based on internally developed technology. According to the company, potential applications for its conductive blacks include electrostatic dissipation, conductive polymers, platinum catalyst support, batteries and energy storage, cables, coatings, packaging for IC parts, automotive parts, and cell phones, among others.

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It should be noted that another US carbon black producer, Sid Richardson, also recently expanded its product portfolio with a new line of conductive blacks under the Sidcon tradename. The line consists of three grades (Sidcon 159, 419, and 119) offering varying levels of conductivity and processability. These three grades complement an existing line of 13 specialty grades that the company has developed and introduced over the last three years or so.

Taken together, the Concarb and Sid Richardson developments mean that all of the US carbon black suppliers (rounded out by Cabot, Evonik, and Columbian Chemicals) can now offer conductive grades. Internationally, Indian-based Phillips Carbon Black has also recently expanded into conductive blacks. These moves reflect a desire to expand the customer base beyond tiremakers and producers of industrial rubber goods.

ASTM Recognizes John Bailey of Concarb

Filed under: Carbon Black — Notch @ 8:49 pm

From ThomasNet comes word that John A. Bailey Jr., a quality systems manager at Continental Carbon Co. in Houston, Texas, has received the Award of Merit and accompanying title of fellow from ASTM International. The Award of Merit is ASTM’s highest organizational recognition for individual contributions to ASTM standards activities. ASTM Committee D24 on Carbon Black recognized Bailey for his exceptional leadership and his contributions in the area of sampling and statistical measurements and the development of new analytical standards.

Another Tire Recycler Enters the Fray

Filed under: Carbon Black, General, Tire Recycling — Notch @ 8:39 pm

From the Maryville Daily Forum in Maryville, Missouri comes news that another tire recycler is entering the market for recycled carbon black. The paper reports that a new company, Carbolytic Materials Company (CMC), is about one month away from opening its pilot plant for a new carbon black alternative process in Maryville. Groundbreaking for the facility was held in November 2008, according to the company. CMC has research facilities in St. Louis, Missouri and a sales office in Hudson, Ohio.

The plant will recycle passenger tires to produce a carbon black alternative that the company is marketing as ApexCM. In the process, CMC will be taking rubber chips — primarily tire shred — and running them through a cooker, which will convert the rubber tire product into raw carbon black. That product will then be ground into a fine dust powder. A binder will be added to pelletize the carbon black alternative. According to the company, the recovered carbon black can be used in automotive, agricultural, construction and industrial rubber applications. According to the company’s website, rubber or plastic products that normally use N700 or N900 carbon black can use ApexCM. Certain applications that use N500 and N600 may also be able to use the material.

Offgases from the process will be recovered and turned into a diesel fuel and a light oil type product. Steel recovered from the tires will be sent to a steel product to a recycling center in St. Joseph. The new plant will initially have 12 employees, and has the potential to employ a total of 35 employees after expansion, according to a company spokesman. The 25,000 square-foot building incorporates production, testing, and office facilities. Initial capacity is 15,000 tons of tires per year, producing 5,000 tons of carbon black replacement. The plant has the potential to expand to 60 tons of rubber per day.

On its website, the company describes its process as follows:

Carbolytic Materials Company (CMC) uses a process that melts scrap rubber and subsequently catalytically “cracks” the polymeric materials back to oil and gas. The remaining solid materials consist principally of the original carbon black materials, which are recovered in a manner that retains their reactivity and usefulness in rubber products. Subsequent finishing steps assure the production of an effective black reinforcing and tinting material that is available commercially today (ApexCM™).

May 3, 2009

Takeaways from Cabot’s 2QFY09 Conference Call

Filed under: Carbon Black, General, Silica — Notch @ 2:46 pm

Here are some key takeaways from Cabot’s conference call for the second quarter FY2009, which was held on Thursday, April 30. The call and the accompanying materials are available here.

General comments: Volumes remain weak due to weakness in the auto, tire, and construction sectors. As such, comparisons to prior years are less useful than sequential comparisons. The quarterly net loss of $56 million is attributable to lower volumes and weaker unit margins. Margin squeeze was caused by the fact that both contract and spot prices have declined substantially, but costs still reflect the flowthrough of higher cost inventory. Cabot expected this higher cost inventory to be sold off by this quarter, but that was prevented by lower volumes, particularly in South Asia. The selloff of higher cost inventory should be completed by 3Q FY2009. They are three-quarters through the process.

Chinese capacity: Cabot expects to start up its new 150 KT units at Tianjin by the end of calendar year 2009, probably in the fall timeframe. Cabot reiterated that these units will be the company’s most efficient and lowest cost plants, using its latest technology. The units incorporate an energy center. Reasons for optimism are that Chinese volumes have improved in recent months, and Cabot expects to improve its competitive position in China going forward. The new Chinese capacity is cost competitive enough that it will allow Cabot to export to the region to the extent that growth starts to come in other parts of Asia.

Margins: In response to a question about how the carbon black industry is holding up and strategizing under the difficult volume conditions, Bill Brady gave this response, “Pricing has moved down as oil and feedstock prices have moved down but I would say generally beyond that we’re finding pricing to be reasonable in these times. And I would say that if we took our prices today relative to the feedstock costs today, we would have margins that you would expect in these times.”

In response to the same question, Patrick Prevost said, “Perhaps another point is on the rubber blacks side and partially on the special blacks side we have still a proportion of our business — in the case of rubber blacks it’s about 50% and a somewhat lower number in special blacks — is under contracts with formulas which provide some assurance to margins in terms of these formulas being linked to feedstock.”

Global demand dynamics: In response to a question about regional versus global conditions, Patrick Prevost said, “In high demand periods when the whole system is fully loaded or close to it, I would say it’s potentially more of a regional picture. As you move into an environment like we have today where we actually restructured or are in the process of restructuring our capacity to the tune of about 16% downward, the game is played in my view more and more at the global level. And a case in point here is that we have actually today product moving from our Colombian operation to Asia and Europe. So what’s happening is that we are utilizing our assets on an optimized basis globally, and because of feedstock price differentials, Platts cost differentials, and much, much lower transportation costs, we’re able to leverage the system much more aggressively.”

Conditions in South Asia: In response to a question about why the South Asia (excluding China) sequential results were so much worse than all other regions, Bill Brady said, “I think the South Asia region probably had the biggest inventory destocking effect in the numbers you’re looking at. So they had the double problem of the lower demand and the considerable destocking.” Earlier in the call, Patrick Prevost also pointed out the heavy dependence on exports (50% or so) for the tire industries of countries such as Indonesia.

Utilization rates: Finally, without providing specific figures, Bill Brady characterized Cabot’s carbon black utilization rates by region as follows:
High utilization: China (for the current period, relative to other regions)
Medium utilization: South America and North America (“Not where we want them to be, by the way, but on a relative basis”)
Low utilization: Japan, Europe

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