News from Notch Consulting, Inc.

May 26, 2014

China moves to scrap 5M vehicles this year

Filed under: Auto — Notch @ 2:31 pm

From Reuters comes news of plans by the Chinese government to remove five million aging vehicles from the country’s clogged roadways this year alone, including 330,000 vehicles in Beijing alone.

In a wide-ranging action plan to cut emissions over the next two years, China’s cabinet, the State Council, said the country had already fallen behind in its pollution targets over the 2011-2013 period and was now having to step up its efforts.

As many as 5.33 million “yellow label” vehicles that fail to meet Chinese fuel standards will be “eliminated” this year, the document said. As well as the 330,000 cars in Beijing, 660,000 will be withdrawn from the surrounding province of Hebei, home to seven of China’s smoggiest cities in 2013.

Beijing plans to limit the total number of cars on the road to 5.6 million this year, with the number allowed to rise to 6 million by 2017. Last year it cut the number of new licence plates by 37 percent to 150,000 a year and is also paying for another 200,000 ageing vehicles to be upgraded.

May 21, 2014

Sid Richardson foresees carbon black shortages in US by 2016

Filed under: Carbon Black — Notch @ 3:40 pm

The United States can expect to see supply shortages of carbon black by 2016, according to Gregory King, vice president of marketing for Sid Richardson Carbon Co. As reported by Tire Business, Mr. King made the comments at the Clemson University Global Tire Conference, held every year in Hilton Head, South Carolina.

“There will be a shortage of carbon black starting in 2016, provided that everyone’s expansion plans for tire production go forward as assumed,” Mr. King said. “Starting in 2016, we’re going to be out of balance.”

Carbon black nameplate manufacturing capacity in the U.S. and Mexico stands at 4.63 billion pounds per year, Mr. King said.

However, EPA efforts to control sulfur oxide and nitrogen oxide emissions from U.S. carbon black facilities will cause domestic capacity to fall to 4.11 billion pounds by 2020, according to Mr. King. Projected demand for that year points to a production shortage of 465 million pounds.

As previously report on this blog, Cabot Corporation was the first of the US carbon black makers to reach an agreement with the EPA regarding emission levels. As a part of the settlement, Cabot committed to install advanced control technology and continuous emission monitoring systems on its U.S. plants. The control technologies will be installed and commissioned over a six-and-a-half year time period at a cost of approximately $85 million.

Sid Richardson and the other US carbon black makers are in active talks with the EPA on how to cut emissions, but Mr. King pointed out in his comments that a one-size-fits-all approach may not work.

“Controlling sulfur-oxide emissions is a matter of installing wet scrubbers,” he said. “We have two plants in west Texas, and we’re not sure we can get enough water there to absorb all emissions. Maybe we could consider air preheating or other options, or find ways to use less oil.”

In any case, the industry can expect an increase in production costs because of the operating cost components over and above the capital costs, Mr. King said.

Notch Consulting is currently tracking $5 billion in new investments in the North American tire industry from 2013 through 2020, of which $4.7 billion will be in the United States.

May 16, 2014

Evonik opens new Applied Technology center in Germany for precipitated silica in tires and rubber

Filed under: Silica — Notch @ 8:19 am

On May 15, 2014, Evonik Industries inaugurated a new building to house precipitated silica applied technology for tire and rubber at its Wesseling site near Cologne, Germany. Evonik invested an amount in the low tens of millions of € in the new building. The building was completed in 13 months and 34 technicians and scientists have been working there since October 2013. Evonik supplies precipitated silica to the tire industry globally from Wesseling where silica production and research were previously located. Thus it made sense to re-locate application engineering to the Wesseling site. Evonik will use the 2,500-square-meter building to develop and test new silica products for the rubber industry. Strict quality control, which is standardized worldwide, is applied to several thousand mixtures annually. The building is heated using waste from the plant’s silica production.

Evonik is in the midst of a worldwide capacity expansion program for its precipitated silica business. In March 2014, it opened an expanded precipitated silica facility in Thailand; in May 2013, it initiated planning for a new facility in Brazil; and it will begin operations later this year in an expanded facility in Chester, Pennsylvania, USA. Evonik’s global silica production capacity will increase by approximately 30 percent over its 2010 capacity by the end of 2014.

Here is the press release: 05-15-IM-Evonik_inaugurates_new_bulding_for_its_Applied_Technology_for_tire_and_rubber_in_Wesseling

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