News from Notch Consulting, Inc.

June 22, 2017

Citing new environmental investments, Continental Carbon announces carbon black price increase for US

Filed under: Carbon Black — Notch @ 1:53 pm

Continental Carbon (Houston, TX) has announced a carbon black price increase of $0.05/lb for all grades and all customers effective August 1, 2017 or as contracts allow. In a letter announcing the increase, Darryl Huntley, VP Sales and Marketing for Continental Carbon, provided several factors behind the move:

Our plants are in need of reinvestment income at the same time that we are implementing pollution control programs resulting from our extensive financial commitment to keep carbon black supply in the US. Obviously we cannot bear the costs for this commitment and improve our plant’s operational capabilities without passing along a portion of those costs to the customer base for whom the commitment was made.

Mr. Huntley goes on to note that,

This increase will initiate the recovery of a portion of the initial costs for our pollution control equipment installation and re-investment dollars for our facilities. This will not cover any of the current or future operational costs for the pollution control equipment.

Finally, the price increase announcement cites the fact that feedstock markets in the US continue to see an unfavorable differential between the HSFO indicator and the actual cost of delivered feedstock.

In addition to initial pollution control design and engineering costs, Phenix City continues to experience highly unfavorable oil costs as premiums to the HSFO indicator persist on the delivered costs of oil to that facility.

There are currently five carbon black producers in the United States. Among these, Cabot and Continental Carbon have reached consent agreements with the EPA regarding new pollution control measures for their US carbon black plants. Continental Carbon also recently announced a $60 million investment in cogen projects for its US plants. The three other carbon black producers in the US remain in talks with the EPA to resolve issues related to emission levels and scrubber technology for their US plants.

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