News from Notch Consulting, Inc.

May 15, 2012

Conti acquires full ownership of Malaysian tire plants

Filed under: Tires — Notch @ 12:49 am

On Monday, Continental announced it has acquired the outstanding 30% of the shares of Continental Sime Tyre Sdn. Bhd. from its joint venture partner Sime Darby Allied Products Berhad. This purchase makes Continental Sime Tyre Sdn. Bhd. a fully owned subsidiary of Continental Corporation, and the company will be renamed as Continental Tyre Malaysia Sdn. Bhd. According to Continental, the transaction reflects its long-term commitment to the Asia Pacific Region.

Continental operates two tire plants in Malaysia. One plant located in Petaling Jaya produces radial truck and bus tires, as well as OTR tires for agricultural and industrial uses. The second plant is located in Alor Star and produces passenger and light truck radial tires as well as motorcycle tires. The tire division in Malaysia employs some 2,500 people.

Here is the press release.

May 8, 2012

Chinese carbon black imports into US increased more than 3000% last year

Filed under: Carbon Black — Notch @ 7:00 am

According to data published by the US ITC, Chinese imports of carbon black (HTS 2803000010) into the United States increased more than 3,000% in 2011; Chinese import volumes rose from 701 tonnes in 2010 to 22,344 tonnes in 2011. This increase made China the second largest importer of carbon black into the US, behind only Canada, which imported 101,731 tonnes of carbon black into the US in 2011, down nearly 9% from 111,713 tonnes in 2010. Total US imports over this period rose 14%, from 151,311 tonnes in 2010 to 172,324 tonnes in 2011. After peaking in May 2011 at 4,278 tonnes, Chinese imports fell more or less steadily over the second half of 2011, and by February 2012 had fallen to just 114 tonnes.

This increase coincides with a dramatic increase in Chinese exports overall; in fact, in 2011 China ranked as the world’s largest volume exporter of carbon black, up from third place in 2010 (behind Russia and Egypt). In addition to its exports to the US, China greatly increased its exports to India, Thailand, Indonesia, Japan, Korea, and Vietnam. As reported here in December, India has initiated an anti-dumping investigation into Chinese carbon black imports.

The increase in Chinese exports is being caused by several factors. Chinese coal tar prices have been quite low compared to crude oil, which means that Chinese carbon black producers that use coal tar oil as their feedstock have had a cost advantage over producers that use decant oil from crude (especially Asian producers importing US CBO). Among other factors, the lower cost of coal tar is being caused by high growth in Chinese steel production (as most Chinese steel is coke-based). In addition, the Chinese domestic market for carbon black was relatively sluggish over the course of 2010/2011, which, when combined with continued capacity expansion activity, left the industry with significant excess supplies in need of customers.

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