According to Dow Jones Newswires, buyout firm Advent International has pulled out of the auction for Evonik Industries AG’s Carbon Black unit. The article sourced people familiar with the situation.
Advent International was one of three bidders remaining in the process. It is unclear why Advent withdrew or whether other private equity firms Triton and Rhone Capital, who were early bidders, are still involved.
Effective April 1, Cabot Corporation will increase prices for all North American Rubber Blacks (i.e., carbon black used in rubber applications) by $0.12 to $0.15 per pound. The increase will apply to all shipments from April 1st for customers not covered by contract. According to Cabot, the increase is necessary due to market conditions, continued cost increases, and the need for reinvestment.
In the same release, Cabot announced that it has revised its package premiums and instituted rail freight charges to more accurately reflect current costs of packaging and transporting carbon black. These changes are also effective as of April 1st for customers not covered by contract.
On Friday, March 18, Cabot Corp. informed customers that it was declaring force majeure for its carbon black plant in Port Jerome, France for 14 days due to a problem with a flare on the stack. The equipment malfunction means that the plant cannot meet its environmental permitting and therefore must shut down until the equipment is repaired.
Last week, Cabot Corp. announced plans to invest more than US$180 million to expand its carbon black capacity in China, Indonesia, Brazil and Argentina by the end of 2013, as well as adding capacity at three facilities in Europe. The expansions will increase Cabot’s annual global carbon black output by about 15 percent, or more than 300,000 metric tons.
The Chinese expansion was detailed previously on this blog, and involves a joint venture with Risun Chemicals Company, Ltd. to build a 130,000 tonne/year plant in Xingtai City, Hebei Province.
Among the newly announced investments, expansions in Brazil and Argentina will increase Cabot’s capacity in that region by approximately 20 percent. In Indonesia, Cabot is increasing capacity by about 50 percent, through a newly announced expansion project in Cilegon, and a previously announced expansion in Merak.
Finally, in Europe, Cabot is preparing de-bottlenecking projects that will expand the company’s capacity by 10 percent. The company did not indicate which of its plants would be affected; it operates carbon black plants in the Czech Republic, France, Italy, and the Netherlands. Over the last several years, Cabot shut down plants in France and the United Kingdom. In the company’s press release, Dave Miller, Cabot executive vice president, indicated that the European projects were partly aimed at expanding grade mix. “With these new investments,” he said, “we’re taking action to help our customers grow anywhere in the world. We’re seeing our customers’ needs shift toward higher-performance grades of carbon black, especially in Europe. These investments will help address these needs.”
Eric Savitz at Forbes has a roundup of the status of tech companies in the wake of the quake.
Cabot Corp. said in a press release that its facilities in Japan have sustained “only minimal physical damage” as a result of last week’s earthquake and tsunami, though external disruptions could pose a problem for the company’s operations in the country. Cabot operates three factories in Japan: two carbon black plants in Chiba and Shimonoseki and a tantalum powder plant in Aizu. Business offices are located in Tokyo and Osaka.
The company’s facility in Shimonoseki continued production, while its plants in Aizu and Chiba lost power and operations were temporarily suspended during the quake. Both facilities are able to manufacture, however supply chain and infrastructure disruptions over the coming weeks are likely to impact their ability to operate in the near term.
Given the terrible scope of the Japan’s earthquake and tsunami, not to mention the ongoing nuclear crisis, it has been difficult to get information regarding the status of Japan’s motor vehicle industry.
According to Timothy Beissmann at Car Advice, all of Japan’s domestic motor vehicle manufacturers have halted production in the wake of the last week’s events.
Honda Motor Co., the hardest hit by the natural disasters, has closed its factories until at least Sunday. Honda has 113 suppliers in the affected areas and still has not been able to make contact with 44 of those.
It is estimated the production of more than 16,000 Honda vehicles will be delayed in the short term as a result of the factory closures.
Toyota looks likely to lose production of 40,000 vehicles, as some of its plants are damaged and others suffer electricity shortages from battered nuclear power stations.
Toyota’s 12 manufacturing plants will stay closed until at least Wednesday. According to estimates from Goldman Sachs, Toyota could lose six billion yen ($72.6 million) in profit each day without production, while Honda could lose as much as two billion yen ($24.2 million) per day.
With the nation’s death toll expected to exceed 10,000, Mazda, Mitsubishi, Nissan, Subaru and Suzuki have all closed their factories – both to ensure that their supply chains are up and running, and also to give workers a chance to regroup with their families.
On March 15, Cabot (China) Ltd., a wholly-owned subsidiary of Cabot Corporation, announced the formation of a new joint venture with Risun Chemicals Company, Ltd., a wholly owned subsidiary of Risun Coal Chemicals Group, Ltd. Cabot owns a 60-percent equity interest in the new joint venture under the agreement.
Cabot and Risun will invest approximately $100 million to construct a state-of-the-art carbon black manufacturing facility in Xingtai City, Hebei Province, about 250 miles (400 kilometers) south of Beijing. The plant is expected on-stream in early 2013 with an initial capacity of 130,000 tonnes/year, expandable to 300,000 tonnes/year at a future date. The new plant will employ advanced emissions control technology and energy recapture.
“Cabot has been a leader in the China carbon black industry for many years,” said Patrick Prevost, Cabot president and chief executive officer. “This investment builds on our strong position in China, where demand for carbon black continues to grow. Cabot has been a successful supplier in China for more than 20 years. Our investment will further build our presence in the region.”
Dave Miller, Cabot Core Segment executive vice president and general manager, said this new facility will enable the manufacture of products not readily available in China. “We are committed to meeting the changing needs of tire producers in this important region,” Miller said. “Our customers know they can rely on us to provide a long-term, secure source of high quality material in China and provide innovative solutions for their needs.”
“We are grateful for the strong support from the Xingtai and China governments for this joint venture project,” said Dr. Xinsheng Zhang, president, Cabot China Ltd., and Cabot president, Asia Pacific region. “We are also excited to partner with Risun Chemicals Company, Ltd., on this new project. Risun has been an important supplier to our current China operations and this joint venture will enhance our relationship, helping ensure supply reliability for the Xingtai facility and providing an outlet for some of Risun’s key products.”
On March 11, Columbian Chemicals Company announced that it will increase prices for carbon black by up to 14% depending on grade. The increase covers both rubber carbon blacks and industrial carbon blacks. All shipments not currently covered by contract are subject to this price increase. The increase was necessitated by a combination of conditions including market environment, raw material costs, increasingly stringent regulatory requirements and Columbian’s commitment to reinvestment in its carbon black business.
Here are the press releases:
Rubber Blacks
Industrial Blacks
As of Friday, March 11, prices for Gulf Coast #6 residual fuel oil had risen 21% since January 1. It seems that fuel oil prices will continue to trend upward in coming months, driven in part by the Japanese tsunami, according to Platts.
A tsunami triggered by a large earthquake that struck northeast Japan Friday and prompting the country’s power operator to shut seven nuclear units will drive utility-grade low sulfur residual fuel oil (LSFO) prices higher, sources said Friday.
While no immediate price effect was said to be seen, “We expect a lot of low sulfur demand [from Japan] for power generation in the next few months,” a a trader in US markets said.
“I do not think anyone has a very clear picture yet, but with the [nuclear] plants down, they will burn fuel oil… and get it from wherever they can,” a second trader said.
Notch Consulting has published a new issue of its bi-annual report the Rubber Chemicals Market Update. The report provides current and projected demand for rubber chemicals, including 6PPD, TMQ, other antioxidants (including phenols and hydroquinones), primary, ultra, and secondary accelerators, and other chemicals (such as retarders, homogenizers, adhesion promoters, and anti-reversion agents). The report includes both quarterly data (2008-2010) and annual data (2000-2010), with forecasts for 2011, 2015, and 2025. Current estimates are based on full year data for 2010.
The report provides an update of global capacity by company for 6PPD, TMQ, and accelerators, including details on ten recent and planned projects, as well as industry news and developments. To order or for more information, please contact Notch Consulting Group at info@notchconsulting.com.