News from Notch Consulting, Inc.

November 26, 2010

Reflections of Rome

Filed under: Carbon Black, General — Notch @ 2:42 pm

The 11th Biennial Carbon Black World conference was held last week at the Crown Plaza hotel in Rome, Italy. The last Carbon Black World conference was held in Vancouver, Canada in November 2008 just as the global economic crisis was emerging, and the general tone of the two conferences couldn’t have been more different. The general mood of the Vancouver conference two years ago was one of wariness and apprehension, as every day there came a new onslaught of bad news — the auto industry in desperate straits, tire plants idling, carbon black expansions being canceled or delayed. In retrospect, as dire as the mood was, the reality was probably worse, as the first six months of 2009 was one of the most challenging periods in the modern history of the carbon black industry, particularly in North America, the European Union, and Japan. The carbon black market in the EU, for instance, saw ten months of volume declines from around mid-2008 and finally bottoming out in April 2009, during which carbon black demand in the EU 27 countries fell an astounding 45%.

As steep as the downturn was, however, the recovery has been quite robust, particularly considering that underlying economic fundamentals (especially unemployment) remain problematic. Reflecting this, the mood at the conference was positive, with several major players planning expansions. Notch is currently forecasting that carbon black demand in the EU 27 countries will rise 15% to 1.4 million tonnes in 2010, after declining by 25% in 2009. The European carbon black industry is operating at or very close to its capacity, a reflection of both stronger domestic demand as well as the 340 KT of capacity that was removed in 2008-2010 (in France, the Netherlands, and the UK). Both Alexandria Carbon Black in Egypt and several of the leading Russian producers are embarking on capacity expansions to meet Europe’s future requirements. At the same time, the world’s number two carbon black producer, Evonik, is in the process of divesting its carbon black business, a development that — depending on how the sale works out — may shake up the industry’s established order.

With the conference over, I am working to complete the latest quarterly carbon black report, which will include fully updated supply and demand data, the latest information on future expansions, and a special report on the specialty black sector (i.e., carbon black used in non-rubber markets). The report will be sent to subscribers of the Carbon Black World Data Book 2010 upon completion. Non-subscribers can write to to order the report.

Above: Colosseum, exterior

Above: Colosseum, interior

Above: ‘Laocoön and His Sons,’ Vatican Museum

Michelin Introduces Aramid-Reinforced Performance Tire

Filed under: Carbon Black, Silica, Tire Cord, Tires — Notch @ 7:54 am

Michelin has announced the launch of a new super sport tire to replace its Michelin Pilot Sport 2. According to Michelin’s press release, the tire’s innovations include an aramid belt (using Twaron), as well as a bi-compound tread (silica and carbon black) and a “variable” contact patch.

According to Michelin, the tire’s aramid-reinforced belt is under variable tension, so that the center of the belt tightens more than the shoulders, leading to a more even geometry, even at high rotational speeds.

The bi-compound tread features a carbon black-reinforced material for good wear on the outer edge of the tread region, which bears the brunt of the wear under heavy cornering, while the inner region is silica-reinforced for good grip in the wet and straight-line performance.

The variable contact patch results from a design in which the shape of the contact patch changes under cornering, but the total area remains more or less constant.

First seen at European Rubber Journal (subscription required).

Ascend Performance Materials Expanding Industrial Fiber Capacity in South Carolina

Filed under: Tire Cord — Notch @ 7:39 am

Houston-based Ascend Performance Materials LLC will invest $3.25 million to expand its Greenwood, S.C., operations, with the expectation of adding 32 jobs over three years. The plant produces nylon industrial fiber for airbags, tire cord and military products, among other applications. The expansion is expected to be completed by March 2011. Ascend Performance Materials is the former nylon business of Solutia; it was spun off as a separate company in 2009.

Trelleborg Acquires Watts Tyre Group

Filed under: Tires — Notch @ 7:34 am

From Rubber & Plastics News (subscription required) comes word that Trelleborg A.B., through its Trelleborg Wheel Systems S.p.A. unit, has agreed to buy Watts Tyre Group, the Lydney, England-based industrial tire maker, for about $32 million.

Snow Mobile Company Enters Tire Recycing Business

Filed under: Tire Recycling — Notch @ 7:20 am

Ultimate Sports, a company that “specializes in every item, large and small, that snowmobilers need in order to enjoy the sport and improve their performance,” has gotten into the tire recycling business, because, why not?

The company has entered into a joint venture with a company called EnSol to fund a tire recycling system called Tire Converter, which converts scrap tires into carbon black, oil, gas, and petroleum solvents. The first unit will be designed specifically to process tire chips. The tire chips will produce gas, carbon black and solvent. The converter unit has been designed to process six tons of scrap tires per day. In return for the investment capital, USI will receive equity and a share of the profit of the joint venture.

From the company’s press release:

Robert Matthews of EnSol states, “Each ton of truck tire feed stock produces approximately 900 lb of carbon black. Carbon black can be sold for about $2-3 per pound. Therefore, one ton of “chipped” tires will produce approximately $2,250 worth of carbon black. Six tons of tires per day can produce about $13,500 of revenue per day. Carbon black can be used to create extruder plastics, paint pigment, rubber manufacturing and filtration mechanisms, and even batteries.”

Two comments:
1. Current contract prices for N550 in the United States are about $0.40 per pound, nowhere near the prices mentioned above. It is true that certain high end pigment grades may sell for $2-$3 per pound, but that brings us to item number 2.
2. Barring some sort of revolutionary development in tire recycling technology, recycled carbon black will continue to be used primarily in relatively non-demanding, non-dynamic applications, such as asphalt modification, floor mats, rubber bumpers, etc. Recycled material is not going into paints, batteries, or tires.

Rhodia’s China Strategy

Filed under: Silica — Notch @ 6:52 am

Chemical Week has an excellent article, China Drives Rhodia’s Asia Strategy, detailing Rhodia’s activities in China, where the company recent opened a new plant dedicated to tire silicas. In addition to its Chinese expansion, Rhodia is planning an expansion of silica capacity at its plant in Chicago Heights, Illinois, possibly by next year, and is considering building a new silica plant, possibly in Eastern Europe.

The Qingdao plant increases Rhodia’s worldwide capacity for highly dispersible silica by more than 30%, to 300,000 m.t./year and it is the company’s fifth plant for those products. The others are at Chicago Heights, IL; Collonges, France; Incheon, Korea; and Livorno, Italy. The new plant helps Rhodia to meet estimated annual demand growth of 9% for highly dispersible silica used in energy-efficient tires. Growth is expected to accelerate over the next five years to double-digit rates “that will last for some time,” Clamadieu says. “High-performance silica for tires is Rhodia’s single most promising innovation.”

The Qingdao unit will initially export its product to Japan and Korea because environmental legislation has created major markets in those countries for energy-efficient tires. But all of the plant’s output is expected eventually to be consumed in China. Demand in China for highly dispersible silica is, for the moment, relatively small. “But we believe that Asia will become the biggest market worldwide within 3-5 years with China becoming the biggest single market accounting for almost 40% of Asian demand,” says Leo Sun, Silica Asia general manager. China is the world’s biggest automotive market, having doubled in size over the last three years to overtake the U.S., and each of the leading tire manufacturers has production in China.

November 11, 2010

CSRC to Expand Capacity for Specialty Blacks and Carbon Nanotubes

Filed under: Carbon Black — Notch @ 12:53 pm

From Taiwan Economic News comes word that CSRC is planning to expand capacity for specialty carbon blacks and carbon nanotubes in China and India in 2011. The article reports that the expansion will total 10 million metric tons, but this is assumed to be incorrect as that volume is larger than the entire global carbon black market in 2010. I am awaiting word on the correct figure.

According to the article, CSRC said it will expand annual output of specialty carbon black by 10 million metric ton in its plant in Anshan City, northeastern China in 2011, as well as set up a new plant in India to produce carbon nanotubes, which will begin construction sometime in 2011.

November 10, 2010

Birla May Bid on Evonik Carbon Black Business

Filed under: Carbon Black — Notch @ 10:59 am

From the Business Standard comes word that Aditya Birla Nuvo is considering a bid for Evonik’s carbon black business.

The Aditya Birla Group is back in acquisition mode, as group firm Aditya Birla Nuvo may bid for the carbon black division of Germany’s Evonik Industries. The division, with annual sales of $1.3 billion and 1,700 employees across 12 countries, is the second largest in the world.

According to two independent investment banking sources, AB Nuvo officials have been approached by bankers to buy out the carbon black division.

In September, Evonik had identified the division as non-core and finalised plans to divest it. Aditya Birla Group, on the other hand, is the fourth-largest producer of carbon black at 900,000 tonnes per annum with facilities in India, Egypt, Thailand and China. Barclays has been appointed to help Evonik with the exercise.

November 5, 2010

Continental Carbon Australia Resolves Boiler Issue

Filed under: Carbon Black — Notch @ 1:21 pm

In its most recent 10-Q report filed on November 4, 2010, Koppers Holdings reported the following information about Continental Carbon Australia:

Our carbon black facility in Australia has experienced operating problems related to a boiler that impacted profitability in the first and second quarters of 2010 by approximately $0.5 million and $1.8 million, respectively. Although the problem was resolved in the third quarter, the impact on third quarter 2010 results was approximately $0.3 million.

Australian CM&C sales increased by $0.7 million as $3.7 million of positive foreign exchange translation impact was partially offset by a $2.3 million reduction in volumes for carbon black.

Waiting for more details on the issue.

November 1, 2010

Evonik Industries moves forward with sale of carbon black business

Filed under: Carbon Black — Notch @ 3:14 pm

According to Chemical Week (subscription required), Evonik Industries has “mandated a bank“ to sell its carbon black business, which was announced in September. During an October 28th press briefing at the K2010 plastics show in Düsseldorf, Evonik Degussa board member Partik Wohlhauser responded to a question from Chemical Week by confirming that the company had chosen a bank to conduct the sale but declined to identify which one. “We have analysed different options for that business,” he said, according to CW, “and came to the conclusion that the best option is to sell that business.”

Powered by