News from Notch Consulting, Inc.

September 9, 2010

Sid Richardson Adds Conductive Blacks to its Product Line, Changes Formula Contract Terms

Filed under: Carbon Black — Notch @ 3:30 pm

Sid Richardson Carbon & Energy issued a press release yesterday, the text of which is reprinted in its entirety below:

Sid Richardson Carbon & Energy Co. is pleased to announce the addition of some new products to its list price sheet. Included is the new family of conductive grades, known as SidCon Blacks, as well as many other specialty grades. For details on these new products, please contact your Technical Service Representative.
In addition to the new products, SRCE is also instituting new standard packaging upcharges for hopper car shipments, a flat fee for plastic pallets, and transloading charges for those occasions when extra handling is required.

For those customers on a formula-based pricing model, SRCE will be converting from Platt’s CBO pricing to a monthly company-average laid-in CBO price. Your salesman will be contacting you to explain this change in the calculation.

We would like to take this opportunity to thank you for your business and to say we look forward to serving all your future carbon black needs.

Notch has some additional information on these developments, presented below:

The conductive line consists of three grades offered under the SidCon Blacks tradename: SC119, SC159, and SC419, of which SC159 is a premium grade with the highest performance characteristics, SC119 is a mid-level grade, and SC419 is a good, lower-cost grade. SC159 is produced at Addis, while the other two grades are produced at Borger. Sid has also expanded its specialty grades, and its portfolio now includes 15 grades: SR123, SR155, SR301, SR303, SR310, SR315, SR385, SR401, SR511, SR530, SR611, SR630, SR699, SR711, and SR750. Most of these grades are produced at Borger, except for SR155 and SR274, which are produced at Addis, SR310, which is produced at both Borger and Big Spring, and SR315, which is produced at Big Spring.

The second announcement related to upcharges reflects a desire to standardize charges for various shipping options. The additional charge for plastic pallets reflects a desire on the part of tire plants to eliminate wood pallets from the factory floor due to the potential for batch contamination from wood particles. The hopper car charge reflects the need to maintain and expand the company’s hopper car fleet.

The third announcement is potentially the most significant. Instead of using Platts prices, Sid Richardson will convert its formula contracts to use a monthly company-average laid-in CBO price, which means the actual price paid for feedstock, including freight surcharges. The company felt that the Platts price was not an accurate reflection of actual costs, particularly for non-coastal plants with significant shipping costs. Otherwise, the formulas will function as traditional monthly contracts.

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