News from Notch Consulting, Inc.

May 28, 2010

Evonik raising precipitated silica capacity in India

Filed under: Silica — Notch @ 3:20 pm

Evonik Industries issued the following press release today:

INSILCO increases capacity of precipitated silica

INSILCO Ltd., India, part of Evonik Industries, Germany, announces a capacity increase for precipitated silica at its production site in Gajraula. The additional capacities will be available by first half of 2011 and will support the growing local demand, in particular of the tire industry.

Here is the release.

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May 26, 2010

Tariffs Have Not Diminished Chinese Exports

Filed under: General, Tires — Notch @ 8:29 am

European Rubber Journal (subscription required) quotes data from Chinese Customs indicating that the US tariffs on Chinese tires have not reduced imports.

According to data from Chinese Customs, Chinese tyre export volume in the period from January to April, 2010, totalled nearly 1.06 million tons, rising by 40.7 percent on the same period a year ago; the export value amounted to $2.80 billion, growing by 39.3 percent over the same period a year ago.

It appears that the US restrictions on tyres imported from China have not affected Chinese exports. In the four months, China exported 234,800 tonnes of tyres to the US, 1.5 percent more than the same period of 2009; the export value came up to USD 612.50 million, dropping by 4.9 percent.

May 20, 2010

Thai Hotel, Site of 2009 Carbon Black Conference, Hit with Grenade Attack

Filed under: Carbon Black — Notch @ 9:17 am

The Dusit Thani hotel, site of the Carbon Black 2009: Perspectives in Asia Pacific conference in November 2009, was the site of a grenade attack on Monday in connection with the anti-government protests that have rocked Bangkok for the last six weeks.

Executives at the Dusit Thani Bangkok Hotel are in shock after the hotel was targeted in a grenade attack that is believed to be linked to suspicions that Maj Gen Khattiya Sawasdipol, a red-shirt leader, was fatally shot by a sniper who was hiding in the property.

Both the allegations and the attacks have shocked hotel staff and executives.

Grenades fired from an M79 launcher hit the five-star hotel late on Sunday night. The blasts sparked off fires on the 14th and 22nd floors when they exploded.

The property is located on Silom and Rama IV roads, an area which has seen heavy fighting between armed troops and red-shirt protesters over the past few days.

This map highlights the rough area of the protest, which ended Wednesday with much bloodshed under a harsh government crackdown on the protesters.

More details here.

May 19, 2010

Email Notice — Switching Servers

Filed under: General — Notch @ 5:20 pm

We are in the process of doing maintenance and switching servers at the Notch Consulting website, so if your email is not delivered please try again in a day or two. We should be back up and running by tomorrow.

LANXESS begins construction of Russian rubber chemicals facility

Filed under: Rubber Chemicals — Notch @ 3:09 pm

LANXESS announced last week that it had officially begun construction of its first production facility in Russia, a rubber chemicals plant in Dzerzhinsk in the Nizhny Novgorod region. The plant will be run by LANXESS-subsidiary Rhein Chemie and will serve markets in Russia and the CIS. The project is due to be completed at the start of 2011 and will create 50 new jobs. The company will produce up to 1,500 metric tons of Rhenogran and Rhenodiv rubber additives and release agents at the new plant. These products are used primarily to manufacture car tires and technical rubber products such as hoses and seals.

“Russia and the CIS are key growth markets for us as part of our strategic focus on the BRIC countries. Construction of this plant is a further important step in our long-term strategy, following our official entry onto the Russian market last year,” said Rainier van Roessel, member of the LANXESS Board of Management. “We are currently seeing a gradual recovery of the rubber industry in Russia, which we want to accompany with a targeted, market-oriented investment.” LANXESS supplies the markets in Russia and the CIS countries mainly with high-performance rubber and rubber chemicals for the tire and automotive industry, color pigments for the construction industry and ion exchange resins for industrial water treatment.

Pirelli Data Indicates Strong Recovery in Tire Markets

Filed under: Tires — Notch @ 2:57 pm

Pirelli has published new data on its global tire markets for the month of April that indicate strong recovery across regions.

In the NAFTA region, OE car and light truck tire sales were up 48% in April year-on-year (yoy) and up 64% year-to-date (ytd), while replacement car and LT tire sales were up 13% yoy and 9% ytd. NAFTA OE truck tire sales were up 40% yoy and 20% ytd, while replacement truck sales in NAFTA were up 33% yoy and 22% ytd.

In Europe (excluding Russia), OE car and light truck tire sales were up 9% yoy and up 28% ytd, while replacement car and LT tire sales were up 14% yoy and 11% ytd. European OE truck tire sales were up 60% yoy and 13% ytd, while replacement truck sales in Europe were up 20% yoy and 33% ytd.

The Mercosur region and Japan also saw good growth.

UK Group forecasts recovery in European vehicle production levels

Filed under: General — Notch @ 2:32 pm

The UK-based Society of Motor Manufacturers and Traders (SMMT) has published a new report forecasting that European automotive production will reach 20.4 million by 2014, back to 2007 levels. In 2010, the industry is expected to see year-on-year growth of nearly 7%, from 16.1 million units to 17.2 million units. The report, European Car and LCV Production Outlook Report, states that production volumes have been underpinned by better than expected performances from several vehicle manufacturers and specific models.

In the group’s press release, SMMT’s chief executive Paul Everitt states, “Although vehicle production volumes across Europe fell by more than 2.8 million units in 2009, there is increasing confidence regarding 2010 and beyond, thanks to the acceleration of new model programmes and the strong performance by many vehicle manufacturers over the first quarter of 2010.”

The group is providing access to the report’s executive summary free to non-members for a limited time. See this link.

May 13, 2010

Tightness in North American Carbon Black Market Causes Scramble

Filed under: Carbon Black, General, Tires — Notch @ 11:19 am

Over the last month, and particularly over the last two weeks, the North American carbon black market suddenly grew quite tight, a situation that left tire companies scrambling to find material in a market where little was available. More than one carbon black supplier told me that they were turning away buyers as they worked to fulfill their own contracted volumes. The shortage appears concentrated in tread grades, though carcass is also tight for some grades. The temporary shortage grew from a confluence of factors, which I have listed below.

1. The US manufacturing sector continues to rebound, with particularly good growth in April. It seems that the robustness of the growth has taken many industries by surprise.
2. Both the tire industry and the carbon black industry emerged from the recession with very low inventory levels, and producers have been very cautious about building up excess inventory until the recovery proved that it was sustainable.
3. For carbon black producers, these low inventory levels mean that they must produce shorter runs of more grades to meet new demand. So instead of running at an ideal rate of, say, seven to ten days at a single grade, which allows them to optimize energy usage and reduce off-spec, they may be forced to produce shorter two-to-three day runs, which increases off-spec and greatly reduces throughput.
4. Add to these factors the fact that the long downturn and an aggressive pricing environment have meant that carbon black producers have not always had adequate funds to keep plants in peak condition, a situation that has led to unexpected downtime.

With Concarb bringing an idled unit back on-stream this month, the shortage should be temporary, as there does appear to be adequate capacity to meet demand. But the long term viability of the carbon black industry is also dependent upon a pricing environment that is more conducive to reinvestment.

Concarb to Restart Idle Unit at Phenix

Filed under: Carbon Black — Notch @ 10:44 am

Amidst a period of extreme tightness in the North American carbon black market, Continental Carbon plans to restart an idled tread unit at its Phenix City, Alabama carbon black plant. The move will bring about 45 KT of tread capacity back on-stream, which had been idled last year during the downturn. The unit should be running by the end of May. Concarb’s other two carbon black plants (in Ponca City, Oklahoma and Sunray, Texas) have all units running.

May 9, 2010

Sid Richardson Raises Carbon Black Prices

Filed under: Carbon Black — Notch @ 11:42 pm

On May 6, Sid Richardson announced a price increase for carbon black, the details of which are provided in the following press release, which is reprinted in its entirety.

Sid Richardson Carbon & Energy Press Release

Effective June 1, 2010, Sid Richardson Carbon Co. will increase the net selling price of all carbon blacks by $0.05 a pound over the May price level. This increase will apply to all accounts not covered by an existing 2010 annual agreement. Going forward all customers can expect to continue to receive monthly spot quotes based on Carbon Black Oil and Natural Gas prices. The new May base prices will be the starting point for increases or decreases that result from the feedstock price movements.

This $0.05 increase will be used to provide the necessary capital to properly maintain and improve our plants in order to continue to be a responsible producer and supplier of carbon black.

We would also like to assure you that this decision was not made lightly and that Sid Richardson values all its partnerships. We appreciate the opportunity to be your supplier.

If you should have any questions, please feel free to contact your Sid Richardson representative.

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