News from Notch Consulting, Inc.

December 21, 2011

New CAFE standards in US may lead to larger vehicles

Filed under: General — Notch @ 4:54 pm

Proving the law of unintended consequences comes this story from Tire Business:

Proposed changes to corporate average fuel economy (CAFE) standards may cause vehicles to get bigger instead of smaller by the 2014 model year, a study by the University of Michigan says.

Researchers said “a loophole” exists in the new formula for calculating miles per gallon. Should auto makers choose to act upon that incentive, it would be more difficult to achieve the policy’s goal of reducing fuel consumption.

[snip]

The U-M study used more than 450 vehicle makes and models to figure how auto makers could modify vehicle dimensions, implement fuel-saving technology features and trade off acceleration performance and fuel economy.

“It’s cheaper to make large vehicles, and meeting fuel-economy standards costs [manufacturers] money in implementing and looking at what consumers will purchase,” said Katie Whitefoot, another researcher involved with the study.

This is by no means a new phenomenon. As readers perhaps are aware, the development of the SUV actually can be traced back to CAFE standards; since light trucks were exempt from the standards, automakers began to build passenger vehicles on truck frames.

“Rollover” traces the origins of the SUV to U.S. automakers’ efforts to circumvent CAFE (Corporate Average Fuel Economy), the stringent fuel-economy laws of the 1970s that contributed to Detroit’s painful decline during that decade. Since light trucks were exempt from the tough new standards, U.S. automakers exploited the loophole and put passenger-car bodies on truck frames. Thus was born the SUV.

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Momentive and Sumitomo collaborate on fuel-efficient tire

Filed under: Silica, Tires — Notch @ 4:26 pm

From Rubber World: Momentive Performance Materials announced its collaboration with Sumitomo Rubber Industries on the development of Enasave Premium tire, which earned the highest rating (AAA) for rolling resistance under Japan Automobile Tyre Manufacturers Association’s (JATMA) labeling system. Launched at the Tokyo Motor Show, December 2-11, 2011, Enasave Premium is the flagship tire in the top-selling Enasave fuel-efficient tire series. Enasave Premium is the world’s first tire to use Momentive’s NXT Z 45 silane, a coupling agent for silica-based tire tread compound and an excellent candidate to consider for improved dynamic and physical properties, including rolling resistance and wet traction. The new silane can virtually eliminate the ethanol that is released during the manufacturing and use of silica tires.

India initiates antidumping investigation into Chinese carbon black imports

Filed under: Carbon Black — Notch @ 4:22 pm

On December 18, 2011, the Indian government announced its decision to investigate whether the increased import of carbon black from China was hurting the local manufacturers who are seeking imposition of a safeguard duty on inbound shipments. India’s domestic carbon black producers have requested the Directorate General of Safeguards (DGS) for immediate imposition of safeguard duty on imports of carbon black originating from China for a period of four years.

“The application has been examined and it has been found that prima facie increased imports of carbon black have caused and are threatening to cause market disruption to the domestic producers of carbon black and as such it has been decided to initiate an investigation…,” the DGS said.

The application has been filed by the Association of Carbon Black Manufactures on behalf of two of its member companies Phillips Carbon Black Limited (Kolkata) and Hi-Tech Carbon (Sonebhadra). The companies account for more than 80 per cent of the total production of carbon black in India.

The imports from China have increased phenomenally from 13,944 MT in 2008-09 to 70,193 MT in 2011-12, an increase of 429 per cent. Besides, the import from China with respect to domestic production was 3 per cent in 2008-09, which has increased now to 11 per cent in 2011-12.

The profitability of the domestic industry has steeply deteriorated due to the increased imports and the domestic industry is now suffering financial losses, the application said.

Cabot moving masterbatch facility from Hong Kong to Tianjin

Filed under: Carbon Black — Notch @ 4:13 pm

Cabot has announced that it will close its Hong Kong masterbatch plant on March 31, 2012, and move the production to its new facility in Tianjin, China. Starting in April 2012, all of Cabot’s masterbatch product made in China will be produced in Tianjin.

Cabot’s Tianjin masterbatch plant, which opened in September 2011, has a current capacity of 45KMT, which in Cabot’s view makes it large enough to supply the current demand of the plastics industry in Asia, as well as its expected near-term future growth. Cabot’s operations in Tianjin incorporate both carbon black production and masterbatching, which creates strong competitive advantages through integrated economics, increased scale, and world-class process technology, according to the company.

Cabot produces masterbatch products for a broad range of uses in the plastics industry, such as key infrastructure and automotive applications. Typical end products include plastic moldings, pipes, cable jacketing, film, and much more. Carbon black masterbatch is a premixed material comprised of a polymer and carbon black for use in a wide range of thermoplastic applications.

December 12, 2011

Cancarb expands thermal black distribution deal with Nordmann, Rassman to Czech Republic & Slovakia

Filed under: Carbon Black, General — Notch @ 2:55 pm

On December 12, Canada’s Cancarb Limited, which is the world’s leading producer of thermal black, and Nordmann, Rassmann GmbH (NRC) announced the expansion of their distribution deal to include the Czech Republic and Slovakia effective March 1, 2012. Currently NRC distributes Cancarb’s range of Thermax® thermal carbon blacks in Germany, Austria and Switzerland.

Here is the press release.

December 6, 2011

RMA lowers estimate for US tire shipments

Filed under: Carbon Black, General, insoluble sulfur, Silica, Tire Cord, Tires — Notch @ 2:53 pm

2011 TIRE SHIPMENTS TO GROW NEARLY ONE PERCENT

Two percent increase anticipated for 2012
WASHINGTON, D.C., December 2, 2011 – The Rubber Manufacturers Association lowered its 2011tire shipment forecast to 287 million total units, which represents a nearly one percent increase or approximately two million units more than 2010. This is a result of downward revisions in year-end economic growth in the U.S. economy.

For 2012, the forecast remains guardedly optimistic as U.S. economic growth is anticipated to remain slow. As such, overall tire shipments are forecasted to increase by more than two percent reaching a total of over 290 million total units. Persistently high fuel costs, a decrease in miles driven by consumers plus moderating growth in the commercial replacement tire sector have led to a restrained outlook.

RMA’s Tire Market Analysis Committee 2011 forecast for key categories include:

Original Equipment (OE) Passenger Tires: OE tire shipments were revised slightly lower to approximately 35 million units, a 5.4 percent increase over 2010, as a result of decreased vehicle production related to supply chain disruptions due to the natural disasters in both Japan and Thailand. The forecast for 2012 is for an approximate 13 percent increase, to nearly 40 million OE units, as available credit and attractive vehicle prices are expected to drive vehicle sales.

Original Equipment Light Truck (LT) Tires: This category is forecasted to experience a nearly 15 percent increase in 2011 to approximately 4.2 million units due to the shift to larger vehicles as a result of more fuel efficient pickups and improved economic conditions in commercial sectors that utilize light trucks. However, a 7 percent decrease, or approximately 300,000 units for a total of 3.9 million units, is forecasted for 2012. This is a consequence of a trend towards light trucks built on car-based platforms instead of truck-based platforms owing to increased vehicle fuel mileage standards and consumer demand.

Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The forecast for commercial OE tire shipments was revised upward for 2011 to approximately 54 percent, reaching nearly five million total units. This underscores the pent up demand for commercial trucks and trailers concurrent with a predicted nearly four percent increase in the Industrial Production Index. For 2012, the forecast is for an additional nearly 10 percent increase as pent up demand offsets a slowing economy.

Replacement Passenger Tire: The forecast for this category was revised to show a decrease of approximately two percent for 2011 as vehicle miles driven have declined, energy costs remain high, and continued economic uncertainty weighs on the consumer. The decrease represents a drop of approximately four million units for 2011 with total passenger replacement units reaching approximately 196 million units. For 2012, less than one percent growth is forecasted – representing an approximate one million unit increase – as economic growth continues to remain sluggish and vehicle miles driven ticks up slightly.

Replacement Light Truck Tire: This category, represented by small commercial vehicle market – mainly “class 3” trucks, was revised downward to an approximate two percent increase in 2011 – a growth of approximately 700,000 units or nearly 29 million total units. The downward revision was primarily attributed to the slower than expected recovery in the light truck category as well as change in light truck platforms to car platforms, which began in 2008. For 2012, no further increase is anticipated as the economy is expected to remain weak.

Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The forecast for this market will remain strong for 2011 as commercial trucking has grown concurrent with the increase in the Industrial Production Index. As such, the market is anticipated to increase by approximately 1.5 million units in 2011 to nearly 17 million units. For 2012, an additional 800,000 units are anticipated as the IPI is forecasted to continue to grow by over two percent.

December 5, 2011

Continental Carbon Australia to shut carbon black plant

Filed under: Carbon Black — Notch @ 3:06 pm

On December 5, Koppers Holdings Inc. announced that it would cease manufacturing operations at its Continental Carbon Australia carbon black manufacturing facility in Kurnell, New South Wales, Australia. The decision, which will affect approximately 65 employees, was made as a result of a detailed analysis of the manufacturing assets in light of deteriorating operating conditions including raw material availability and cost, competition in export markets due to the strength of the Australian dollar, and a variety of other factors. Manufacturing operations at the facility will cease during the week of December 5, 2011 and the facility will transition to closure over the next four months. The Company will continue to maintain a presence in Australia through its tar distillation facility as well as its business operations in treated utility poles and related products.

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